Ailing N.A. Vaccine says it has a suitor; Columbia company won't name bidder, says talks under way


North American Vaccine Inc. said yesterday that an unidentified suitor has made a bid for the financially struggling Columbia biotechnology company.

North American also disclosed that the potential buyer guaranteed a $5 million revolving bank credit line that was critical to its meeting $2 million in bond interest payments due yesterday. The remaining credit can be used to fund operations.

Spokesman Thomas Newberry said North American would not identify the bidder. He said the company is in exclusive negotiations with the possible buyer, though the proposal is not binding on either side yet.

The company's announcement yesterday made it clear that the suitor is not BioChem Pharma Inc., a Canadian pharmaceutical company that is its largest shareholder. North American said the negotiations are with an "unaffiliated third party."

Industry analysts said often-mentioned buyout candidates on Wall Street include Baxter International Inc. of Deerfield, Ill., a medical-supplies giant. Baxter is spinning off its cardiovascular division as a separate company to focus on boosting sales in its profitable drug-delivery and blood-therapy units, and it has been on an acquisition binge of late.

Pasteur Merieux Connaught of Swiftwater, Pa., a vaccine maker that has a marketing agreement with North American, also is considered a possible suitor. Randall Chase, North American's chief executive officer since last November, is a former president of Canadian operations for Pasteur, a unit of Rhone Poulenc SA

Neither Baxter nor Pasteur would comment.

North American, which has about 300 employees, said any acquisition will occur as a stock transaction or merger. The offering price, it said, is "in line with the recent trading price" of the company's common stock.

The company's shares closed yesterday at $5.25, down 62.50 cents. Newberry said the company will not be more specific about the proposed purchase price.

The newly secured line of credit made $5 million available to North American Vaccine as interest payments came due yesterday on bond notes.

The company's bonds were trading last week at about 50 cents on the dollar, said Michael J. Kaplan, an analyst with Standard and Poor's Ratings Service in New York.

If the cash-strapped company had defaulted, one of the company's chief vaccine patents, covering its experimental vaccine for meningitis, would have been imperiled, according to company documents on file with the Securities and Exchange Commission.

That patent was used by the company to secure a $25 million loan from BioChem Pharma and Dr. Phillip Frost of Miami last year. They are North American's largest shareholders, with more than 54 percent of the company.

The company said the $5 million line of credit is secured by all of its other assets, including vaccine patents and patent applications.

North American said the unidentified bidder has pledged to guarantee an additional $25 million line of credit if "certain conditions" are satisfied by North American.

Newberry declined to comment on what those conditions are, but industry analysts think the additional financing is tied to the company's landing marketing approval in the United Kingdom for its meningitis vaccine.

British health authorities have said that if the vaccine is cleared for use, they will buy up to $65 million worth of the vaccine for a mass immunization program planned for next year.

The company's only U.S.-approved product is Certiva, a vaccine that protects children against diphtheria, tetanus and whooping cough.

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