BIOPLASTY'S NON-U.S. PRODUCT SALES
This article was originally published in The Gray Sheet
BIOPLASTY'S NON-U.S. PRODUCT SALES will be the firm's only source of income for the immediate future in the wake of the divestiture of its wound care business, which was announced Feb. 19. The company's remaining plastic surgery and urology segments are currently operating only in overseas markets due, in part, to regulatory issues with FDA over the past year involving silicone- based products. In a Feb. 19 press release, Bioplasty says that it has sold its wound care business and "newly constructed office, production and warehouse facility" in St. Paul, Minnesota to former President and CEO Timothy Lawin, for $1.85 mil. The payment consisted of $1 mil. in cash and a $850,000 short term note. Under the terms of the deal, Bioplasty transferred "the real estate and the assets and liabilities of the wound care business as of Feb. 1" to Lawin on the same day as the announcement. The wound care segment, which had sales of between $1.5 mil. and $2 mil. in FY 1992, was redesignated Brennan Medical Inc. following the transaction. All personnel within the wound care business have been retained by Lawin, whose resignation as president and CEO of Bioplasty was announced Feb. 22. Lawin's posts have been assumed by Bioplasty Chairman Daniel Holman. On Feb. 27, the firm moved its headquarters to an existing Minneapolis production facility. Bioplasty intends to use the proceeds from the deal to pay "various legal costs" including the settlement of a shareholder class action securities litigation. The suit alleged that Bioplasty violated federal securities laws by not revealing that it had made "false and misleading" claims to FDA ("The Gray Sheet" March 2, 1992, p. 7). Bioplasty denied the allegations. The settlement agreement, which became effective Feb. 19, included $825,000 in cash and a $500,000 note payable in six months. A proposed $3.3 mil. settlement announced Feb. 26, 1992, did not take place and was subsequently renegotiated.
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