N. American Vaccine says it's in talks

Potential buyer isn't identified by Columbia company

Cash in short supply

About 300 work at headquarters and Beltsville plant


July 07, 1999|By Mark Guidera | Mark Guidera,SUN STAFF

Financially struggling North American Vaccine acknowledged yesterday that it is in talks with another company interested in purchasing all or part of the Columbia-based company.

Tom Newberry, director of investor relations for North American Vaccine, declined to identify the suitor.

"The only thing I can say is these are more than preliminary discussions," Newberry said.

He said North American was in discussions with one potential buyer but had multiple discussions under way to license out experimental vaccines on which the company has been working or to form alliances for co-developing and co-marketing vaccines in the company's pipeline.

Randal Chase, chief executive officer and president of North American Vaccine, declined to comment on negotiations involving a potential sale of the company, which has about 300 employees at its headquarters in Colum- bia and vaccine production plant in Beltsville.

In a statement, the company said, "These negotiations involve potential transactions ranging from single or multiple product distribution, license or other collaboration agreements, which may include upfront and milestone payments, through a potential sale of all or substantially all of the company."

The disclosure that the company is for sale comes after a federal judge's dismissal of a lawsuit against it last month.

The news that the company might be sold is no surprise. Evan Sturza, a Wall Street analyst and editor of a biotechnology investment newsletter, predicted this year that the company would have to be sold because it was running out of cash.

According to the company's most recent financial report, it had $13.5 million in cash on hand as of March 31. Its operating expenses were $11 million during the quarter that ended then.

The company, which markets combination vaccines for children that provide protection for whooping cough, diphtheria and tetanus in the United States and Europe, had $1.5 million in revenue for its second quarter. Abbott Laboratories co-markets the combination vaccine, Certiva, in the United States.

North American also disclosed yesterday that its largest shareholder, BioChem Pharma Inc. of Canada, has agreed to guarantee a $6 million line of credit with a commercial bank.

The guarantee is good for two years, North American Vaccine said. If granted, the line of credit would be used to fund the company's short-term cash require- ments while it works on negotiations to sell the company or one of its other initiatives to raise cash.

"We are quite pleased that BioChem has continued its support of our efforts," Chase said. "This is one element of an overall plan intended to allow us to continue to meet our financial requirements as we move forward to complete various collaborations and strategic initiatives with others."

North American shares, which have fallen from a 52-week high last July of $18, closed yesterday at $5.4375, up 37.5 cents.

Pub Date: 7/07/99

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