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Executive Summary

SEARLE COMMITTING $1 MIL. FOR LIPOSOME/DRUG DELIVERY WORK through a development and equity purchase agreement with Medi-Control Corp. (MCC), a majority-owned subsidiary of Biotechnology Development Corp. Searle is putting $500,000 directly into development projects and for an equal amount of money is purchasing an initial equity position of less than 10% in MCC. Searle also is getting the right to buy an additional $1.5 mil. worth of MCC stock. The agreement was announced Sept. 25. Searle is the first drug company to contract with Biotechnology Development Corp. (BDC) for formulation work through its new subsidiary. MCC was formed three months ago by Biotechnology Development Corporation as a contract formulation lab. MCC will also do formulation development work with other clients. According to the Sept. 25 press release, "MCC intends to focus on delivery systems for four routes of drug administration: topical, transdermal, transmucosal, and oral." BDC Chairman Irwin Gruverman said the MCC subsidiary was formed to "apply proprietary BDC mixing and encapsulation technology to drug delivery, including the patented Microfluidizer equipment, which can manufacture discrete, small uniform liposomes and microemulsion droplets." BDC explained that "liposomes are biodegradable envelopes formed from lipid materials such as cholestrol and lecithin in which medications or nutrients can be encased to alter their normal distribution in biological systems to preserve them under circumstances in which they would otherwise be degraded or altered by metabolic processes." MCC will buy its microfluidizing equipment from another BDC subsidiary, Microfluidics Corp. (MFC). That subsidiary sold about $500,000 worth of microfluidizing equipment in 1985. The company reports that MFC sales were up 64% in the first half of this year. Four large scale microfluidizers (M510's) and 125 smaller lab work models (M110's) have been sold. BDC has been working on liposome formulations for at least three years. In 1983, MFC acquired a license from Arthur D. Little, Inc. to manufacture and sell Microfluidizer equipment. In 1985, BDC revised the license to purchase all rights to Microfluidizer technology. MFC's clients are in research and development fields related to health care, drug delivery systems, pharmaceuticals, and cosmetics. The microfluidics technology is also used in the chemical process industry, consumer product industry and in dispersion of fine powders. The parent company, BDC, was founded March 16, 1982. The company went public at the beginning of 1984 with an offering of 650,000 units through D. H. Blair and Baird, Patrick. The offering was designed to raise $3.5 mil. ("The Pink Sheet" Jan. 2, 1984, T&G-7).

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