SysteMed Plans Stock Sale to Prepare for Growth

SysteMed Inc., which changed its name from Newport Pharmaceuticals earlier this month, announced Friday that it plans to sell an additional 2.5 million shares of common stock to prepare for growth.

SysteMed primarily sells, through its America’s Pharmacy Inc. subsidiary, mail-order prescription drugs in connection with employer health plans throughout the United States. The subsidiary, which accounts for 90% of corporate revenues, is expected to reach $75 in sales this year, according to the company.

The stock issue--which if sold at Friday’s closing price of $4.50 would raise $11.25 million--is intended to pay for the development of a new database system to assist in the dispensing of drugs and billing of customers, said Judith Woodward Archbold, SysteMed vice president and general counsel. It would also pay for the acquisition of capital equipment and the enhancement of dispensing facilities, she said.

The stock issue would first need Securities and Exchange Commission approval and would be sold at market prices.

SysteMed is anticipating the first annual profit in its 20-year history, chiefly because it has moved its business focus toward the mail-order service and away from making its antiviral drug Isoprinosine, Archbold said.