BioChem Pharma Inc., a Canadian company with a U.S. marketcapitalization of $2 billion, is selling 3 million shares to grow thebusiness.
The Laval, Quebec, company said Tuesday it registered to sell sharesin Canada and the U.S. BioChem Pharma trades on the Toronto andVancouver exchanges (BCH) and on NASDAQ (BCHXF), where thestock lost $2.13 Tuesday to close at $41.75 per share.
At that price the offering would gross the company more than $125million. Five firms are underwriting the offering.
The developer of the recently approved HIV drug, 3TC, hopes toacquire companies, technologies and/or product rights with theproceeds, said Christine Lennon, BioChem Pharma's vice president,investor relations and corporate communications. She added that nosuch acquisitions currently are being negotiated.
"The company is in a growth phase," Lennon said. "We're enteringour 10th year of operation. Every year we take another step in ourgrowth."
Fueling that growth has been the development and marketingapproval of Epivir (3TC), a nucleoside analogue, and lamivudine, thesame molecule in late-stage development for hepatitis B.
BioChem Pharma had about $35 million on Sept. 30, 1995, its lastreporting period. For the first nine months of 1995 the company hadrevenues of $98 million and a net loss of $6.2 million.
Epivir was cleared for marketing in November 1995 for use incombination with AZT. London-based Glaxo-Wellcome plc ownsAZT and has worldwide rights, excluding North America, to Epivir.An equally owned joint venture will commercialize the drug inCanada and Glaxo will be the exclusive distributor for the jointventure in the U.S. Analyst estimates suggest BioChem Pharma isgetting 12 to 15 percent royalties on 3TC sales.
BioChem Pharma stock has quadrupled in value the past year from its$10.37 closing price at the end of 1994. That increase gave thecompany unexpected publicity in the form of F. Lee Bailey, therenowned attorney whose former client held 602,000 BioChemPharma shares. The client, Claude Duboc (who fired Bailey lastmonth), pleaded guilty to conspiracy to import drugs and moneylaundering charges in 1994 and agreed to forfeit more than $100million in drug-related assets.
But Bailey was allowed to hold the BioChem Pharma shares becauseDuboc, desiring to maximize forfeitures to the U.S., suggested it wasexpected to "increase dramatically in value in the near future,"according to court documents.
The stock did rise dramatically, as Duboc predicted _ from $6million in 1994 to more than $25 million today. The U.S. governmentwants the stock back. Bailey said he was under the belief that theU.S. transferred the stock directly to him in 1994; since he assumedthe risk for loss he was entitled to gains, he argued, according tocourt papers.
Federal District Judge Maurice Paul, in the Northern District ofFlorida, on Saturday issued an order of civil contempt against Bailey,a spokeswoman in the U.S. clerk of the court office in Tallahasseesaid.
Given the potential of 3TC and lamivudine _ which is in sevenPhase III studies _ the disputed holdings could increase as about400,000 shares sit frozen in a Swiss account.
Lennon said BioChem Pharma hopes to take BCH-2687, an opioidagonist, into the clinic this year. The compound is being developedwith Astra AB, of Sodertlje, Sweden. She said a vaccine candidatealso is expected to go into the clinic, and new diagnostic productintroductions are planned this year.
Last year BioChem Pharma and Warner-Lambert Co., of MorrisPlains, N.J., entered into a collaboration to develop orally activesmall molecule compounds to prevent thrombosis. The deal could beworth up to $30 million for BioChem Pharma. n
-- Jim Shrine
(c) 1997 American Health Consultants. All rights reserved.