Making another move in its recovery from the brink ofbankruptcy, Bio-Technology General Corp. today announcedthat it has nominated Gerald Laubach, recently retiredpresident of Pfizer Inc., to its board of directors.
The new appointment is the latest in a shake-up at Bio-Tech(NASDAQ:BTGC) that some industry watchers predict could turnaround the company's stock.
By adding the 40-year veteran pharmaceutical executive to itsboard, the company has enhanced its management team, saidMichael Gordon, portfolio manager for funding at SelectBiotechnology of Fidelity Investments in Boston. Last July, Bio-Tech recruited Brooks Boveroux to be senior vice president offinance. Boveroux was part of the management team thatsuccessfully turned around Biogen Inc.
Other factors now in Bio-Tech's favor are its improved financialstructure, its interesting drug pipeline, and the possibility ofnear-term revenues from the European sales of its humangrowth hormone, hGH, said Gordon, "all for less than a $60million market evaluation." And all from a company that wasremoved from NASDAQ in April 1989.
At that time many market analysts, such as Vector Securities ofDeerfield, Ill., dropped Bio-Tech. But the company managed toget relisted eight months later, following massive reduction ofits debt load from $30 million to one-quarter of that figure. Thereduction was achieved when bond holders chose thecompany's offer for a debt exchange rather than a Chapter 11filing. For each $1,000 bond, holders received a $250 bond plus200 shares of common stock.
Then last February, David Blech, the well-known biotechventure capitalist, sank $3.1 million into the New York-basedcompany. Blech holds two seats on the board of directors andowns 30 percent of the company. A second private investmentby an unnamed group in July added $5 million to Bio-Tech'scoffers.
Bio-Tech hopes this year to enter the European market withhGH to treat children with short stature. The company'smarketing approval application for hGH is due to be reviewedin March by the Committee for Procurement of MedicinalProducts, a prerequisite for marketing in European Communitymember countries. SmithKline Beecham Corp., Bio-Tech'sEuropean marketing partner, projects the European market at$100 million to $120 million, according to Bio-Techspokeswoman Leah Berkovits. Bio-Tech will receive 30 percentroyalties on hGH sales. Because Eli Lilly & Co. has orphan drugstatus for its hGH, Bio-Tech cannot market the drug in theUnited States until 1994.
Of Bio-Tech's 13 pipeline drugs, bovine somatotropin (BST), thegenetically engineered hormone used to increase milk yield incows, is expected to be the first on the U.S. market. BST iscurrently under review by the Food and Drug Administration,which is not expected to reach a decision until 1992.
-- Rachel Nowak BioWorld Staff
(c) 1997 American Health Consultants. All rights reserved.