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BioPort's parent may go public - Stock sales would help fund expansion in Lansing

By Jeremy W. Steele
Lansing State Journal

The parent company of anthrax vaccine maker BioPort Corp. might go public in an effort to raise cash for its $75 million Lansing expansion and clinical trials of new products.

Gaithersburg, Md.-based Emergent BioSolutions Inc. has filed a registration statement with the Securities and Exchange Commission for a proposed initial public offering of common stock.

"This is simply the first step for the process," Emergent spokesman Robert Burrows said.

Such an offering, if approved by the SEC, could bring in more than $86 million, Emergent said in its regulatory filings.

That would cover two years of Emergent's operations and capital expenditures, including the new 50,000-square-foot vaccine production facility being built on BioPort's campus, filings said. Emergent plans to have the plant operational by 2008.

The number of shares to be offered and the price range have not been determined, the company said. However, it has applied to list its stock under the ticker symbol "EBSI" on the Nasdaq stock market.

Emergent was formed in 2004 as the parent of BioPort, which was created in 1998 from the purchase of the anthrax vaccine lab from the state of Michigan. It employs more than 300 in Lansing.

Fuad El-Hibri, Emergent's president, chief executive officer and chairman, now owns more than 99 percent of the company's outstanding common stock.

The company largely has grown through the acquisition of other vaccine makers and has been profitable for the past three years.

It made $15.8 million on revenue of $130.7 million in 2005. Emergent made an $11.5 million profit in 2004 and $4.5 million profit in 2003.

However, Emergent cautioned in SEC filings that it remains reliant on its one product line for sales - the anthrax vaccine. And 99 percent of those sales are to U.S. government sources.

Several other companies are nipping at Emergent's heals with new anthrax products.

Vaccine maker VaxGen Inc. was awarded an $877 million U.S. Department of Health and Human Services contract in 2004 for the anthrax vaccine it's working on.

California's VaxGen has yet to ship any product.

In June, HHS bought 20,000 doses of an anthrax treatment from Maryland's Human Genome Sciences Inc. for about $165 million.

Emergent has vaccines for typhoid, Hepatitis B and streptococcus in clinical trials.

Vaccines for botulinum toxin, chlamydia and meningitis B also are in the works.

Whether those vaccines will get U.S. Food and Drug Administration, however, is another unknown for Emergent. Contact Jeremy W. Steele at 377-1015 or jwsteele@lsj.com.