The Liposome Co. Inc. said that Marc J. Ostro has resigned asvice chairman to become a general partner of MHO Partners, anewly formed investment firm specializing in biotechnology.
Ostro and his two partners are hoping to raise $150 million fora 10-year fund that will make private investments in publiclyheld biotech and medical device companies, Ostro toldBioWorld.
MHO's plans are reminiscent of the "fallen angels" strategy thatNew York investor David Blech has followed for many of hisinvestments in publicly traded biotech companies.
MHO foresees providing money to companies that need tocomplete Phase II trials, for example, or to complete asignificant piece of their science, Ostro said. MHO investmentswill "allow them to go forward, to get corporate partners, or toraise money in the public market at a higher valuation," hesaid. "If the window stays closed, a lot of companies will need asource of funds. We can get a discount on stock prices."
In addition, companies that last year might have done initialpublic offerings rather than a mezzanine round of financing nolonger have that option, Ostro said. MHO will put money intothose companies, as well as do some seed financing.
The other full-time partners at MHO are Donald Hudson, whofounded or co-founded Integrated Genetics, Organogenesis andTSI Corp.; and Philip McCarthy, an attorney who most recentlyformed MBW Venture Partners.
Ostro, who has a doctorate in biochemistry, will remain adirector of Liposome (NASDAQ:LIPO). He will serve as chiefscience officer until a replacement is found.
"What caused me to change was taking stock of my owndesires," Ostro said. "I'm 42 and the question was, did I want todo liposomes for the rest of my life? The answer was no. Thecompany has evolved to the point where I felt that the bulk ofmy job was done. I feel the company is in strong hands."
Liposome shares (NASDAQ:LIPO) rose 38 cents to $11.13.
-- Karen Bernstein BioWorld Staff
(c) 1997 American Health Consultants. All rights reserved.