Credentials, Medical Science Planning IPOs
Medical Science Systems Inc., a company that develops genetic markers for gum disease and other common ailments, aims to raise up to $13.5 million in an initial public offering.
In a filing with the U.S. Securities and Exchange Commission Wednesday, the Newport Beach company said it plans to sell 1.5 million shares, at about $9 a share, and take in at least $11.7 million. If underwriters buy more stock, the company could receive an additional $1.8 million.
The biggest chunk of proceeds--$5.2 million--would fund sales and marketing for new products. The rest would repay debt, support research and development, and support other purposes.
The company launched sales of a test for genetic susceptibility to gum disease at a professional medical meeting in San Diego last week. It hopes to start selling a test for osteoporosis late next year. And it’s developing tests for heart disease and blindness associated with diabetes.
According to the filing, investors risk the possibility that the markets the company is pursuing won’t accept its product. It began selling the gum-disease tests last week for $210, though earlier this year an official said it hoped to get $40 to $90 more apiece.
Two dentists--Kenneth S. Kornman and Michael G. Newman--started the company in 1986 to development new methods, tools and technologies for dental practitioners. Kornman, a former University of Texas professor, and Newman, a former UCLA instructor and researcher, derived initial revenue on research contracts with drug companies.
In 1992, they expanded into medical research and two years later began their own product development. The two originally operated under two separate Texas corporations which merged to form Medical Science Systems two years ago.
The co-founders, now company executives and board members, would each control about one third of the company’s stock after the offering. The company’s chief executive, Paul J. White, a lawyer, would control another third.
The company lost $788,546 last year on sales of $1.9 million, compared with earnings of $150,012 on about the same sales the year before. This year, it expects losses will total $3.6 million. As of June 30, its accumulated deficit stood at $2.71 million.
