Philippa MaisterBioSepra Inc. grossed $21 million with its initial public offering of 3million shares of common stock which began trading Friday on theNASDAQ. The issue was underwritten by D. Blech and Co. of NewYork, which has a 45-day option to purchase an additional 450,000shares, and were disposed of as part of a syndicate offering. The IPOwas registered Feb. 14.The shares were offered at $6.50 to $8.50 and traded at $7 each.BioSepra (BSPR) develops, manufactures and sells chromatographicmedia and process development systems for use by pharmaceuticalcompanies in the purification and production of pharmaceuticals.According to its prospectus, the company's media products are used bypharmaceutical companies in the production of 15 commercialbiopharmaceuticals, including interferons, insulin, human growthhormone, erythropoeitin, and vaccines. Toward the end of the year, thecompany plans to introduce its ProSys Workstation, a computer-controlled instrument designed to allow customers to optimize processparameters based on a small number of experiments.BioSepra was spun off its parent company, Sepracor of Marlborough,Mass., in December 1993. Sepracor retains a 57 percent interest in thecompany. This would decline to 53 percent if Blech exercises itsoption.After this offering, the company has 7 million shares outstanding.Sepracor is being sued by PerSeptive Biosystems, Inc. for patentinfringement and false advertising and BioSepra was included as adefendant in the suit. In its prospectus, BioSepra stated that, in theopinion of its patent counsel, a properly-informed court wouldconclude that the manufacture, sale or use of BioSepra's commercialHyperD media products did not infringe any valid claims of the U.S.patents held by PerSeptive."The fact that BioSepra was able to bring its stock to the market inspite of the lawsuit indicates that the suit was not a factor for investorsin judging the success of our products," said Bill Rich, president andchief executive officer.BioSepra's main competitors are PerSeptive Biosystems andPharmacia. Rich said BioSepra has 5 percent to 10 percent of theworldwide market for chromatographic media products.According to its prospectus, BioSepra has been operating at a loss since1990. It had a net loss of $4.4 million for the nine months ended Sept.30, 1993. Some analysts said that Sepracor's decision to spin offBioSepra was prompted by these losses. However, Rich said his goal isto make BioSepra profitable by 1995."What we felt was that the value of Sepracor's technology was notbeing reflected in its stock," Rich said. "By spinning off we couldprovide extra value for our stockholders."Rich said the company has received "very large" orders over the pastthree months. He declined to be specific about negotiations he saidwere now going on with a large biopharmaceutical company.Sepracor also spun off another company, HemaSure Inc., a maker ofblood-related products. HemaSure has filed an IPO application and isexpected to go public in the coming weeks, Rich said.
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