Envirogen Inc. filed for an initial public stock offering in a bidto become what it sees as the first pure-play public company inbioremediation, or the use of nature's own bugs to clean uptoxic pollutants.
Envirogen of Lawrenceville, N.J., which is developingproprietary methods for cleaning up chemical PCBs and othertoxic contaminants from soil and water, plans to sell 1.2 millionshares at between $7 and $8 each. The IPO's new shares wouldgive the company 5.8 million shares outstanding and animplied market value of between $40.6 million and $46.4million.
According to a preliminary prospectus filed with the federalSecurities and Exchange Commission, the anticipated proceedsof about $9 million to $11 million from the IPO are to be usedfor research and development, purchases of laboratory andfield equipment, and general corporate purposes.
The company is developing strains of organisms andbioreactors to degrade and transform toxic wastes on site. It isalso researching genetic modifications of organisms to attaingreater efficiencies. Vapex Environmental Technologies, whichEnvirogen acquired last November, applies vapor extractionsystems to removing organic compounds from soil andgroundwater.
Envirogen traces much to its technological heritage of twowidely disparate companies, Amgen Corp. and General ElectricCo.
From Amgen, Envirogen acquired in 1990 an exclusive licenseto methods for the biological destruction of synthetic chemicals-- specifically TCE (trichloroethhlene) -- and contact withformer Amgen researcher Burt Ensley, now Envirogen'sdirector of advanced technologies. Before focusing exclusivelyon human health care products, Amgen explored ways tobiologically produce chemicals and the reverse of that process,their biological destruction. The Thousand Oaks, Calif.-basedcompany still holds a small equity stake in Envirogen.
Even before connecting with Amgen, Envirogen hired theformer head of GE's ground-breaking effort in PCB(polychlorinated biphenyl) clean-up, Ronald Unterman, who isnow Envirogen's vice president of research and development.Before their hazards were understood, PCBs were usedextensively in manufactured products.
Envirogen plans to start two field projects this summer aimedat removing TCEs at undisclosed sites. It is also plans to startwork in the fall on PCB removal at two sites, one near an Alcoaaluminum plant in Massena, N.Y., and one at a pipeline site inwestern Pennsylvania. It is also working on otherbioremediation projects for General Motors Corp., AmericanCyanamid, and the federal departments of energy and defense.
The preliminary prospectus lists as the company's largestexisting shareholders (including vested stock options): DavidBlech, who owns 923,000 shares; Robert Johnston, companyfounder and chairman, with 928,000 shares; Schroder VenturesLtd. of New York with 502,500 shares; and Allen & Co.of NewYork, the sole underwriter of the IPO, with 375,000 shares.
The company has raised about $10.5 million since its foundingin June 1988. The most recent funding was a $7 million privatestock placement head by D. Blech & Co.
The preliminary prospectus said the company sustained a$695,000 loss on revenues of $733,000 for the quarter endedMarch 31. It has 63 employees and occupies a 34,000-square-foot office and pilot plant in Lawrenceville.
-- Ray Potter Senior Editor
(c) 1997 American Health Consultants. All rights reserved.