Martek Biosciences Corp. announced Tuesday that it hascompleted its initial public offering (IPO), grossing $14 millionon the sale of 2 million shares of common stock at $7.00 pershare. The company had filed a registration statement with theSecurities and Exchange Commission (SEC) for the sale of 2.7million shares on Oct. 19, but since then had "reduced thenumber of shares (by amending the registration statement)when we felt we couldn't get the price," said Steve Dubin,Martek's chief financial officer. The company's shares are listedon the NASDAQ National Market as MATK. As of the offering,there are about 7,754,000 shares outstanding, Dubin said.

Hambrecht & Quist Inc., Bear Stearns & Co. Inc. and SalomonBrothers Inc. acted as managing underwriters.

Martek was founded in 1985 to develop and commercializeproducts derived from microalgae through various of itsproprietary technologies for culturing the aquatic plants. Thecompany, which is located in Columbia, Md., has also amassedan in-house library of over 1,500 species and a relateddatabase on the vast assortment of microalgae that exist innature.

Martek is using its library to develop a broad array ofproducts--including nutritional supplements for infant formula,stable isotope biochemicals for use in pharmaceutical researchand rational drug design, various breath tests for diagnosingcertain gastrointestinal disorders and potential pharmaceuticalcompounds.

The furthest along in development is the nutritionalsupplement for infant formula, termed Formulaid. It providestwo fatty acids--docosahexaenoic acid (DHA) and arachadonicacid (ARA)--that are naturally present in human milk butcurrently not available in the majority of infant formulas.Martek uses its proprietary technologies to produce the fattyacids from a blend of oils from microalgae and fungi. It hasentered into royalty-bearing license agreements with three ofthe world's leading infant formula producers--Mead Johnson &Co. (a subsidiary of Bristol-Myers Squibb Co.), American HomeProducts Corp. and Nutricia B.V.--to pursue incorporation ofFormulaid into their infant formula products.

Martek has funded its research and development effortslargely through a series of small business innovation research(SBIR) grants from government agencies. In fact, the companyhas been awarded a total of 36 SBIR grants over the years, tothe tune of $5,375,000, said Dubin. The company has also hadventure finance backing. Most recently it placed $3.3 million ofseries D convertible preferred stock with various investors,including LM Private Investment Partnership and SalomonBrothers Venture Capital Fund. In May 1990, Martek sold $2million of series C convertible preferred stock to investors ledby Salomon Brothers Venture Capital Fund and includingOxford Partners, Elf Technologies, Sovran Funding Corp., D.C.Bankcorp Venture Capital Co. and certain individuals.

-- Jennifer Van Brunt Senior Editor

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