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Executive Summary

BANMAX PAYING $350,000 FOR SK-LINE GENERICS, according a the Sept. 4 prospectus for an initial public offering of 800,000 units consisting of 1,600,000 shares of common stock and unit warrants. Each unit costs $5 and consists of two shares of common stock and one unit warrant. Rochester, New York-based Banmax said it completed the acquisition of the 12-product SK-Line on Oct. 30. The products are the first for the company. Ten of the products are approved for marketing. Prior to becoming president of Banmax, Pradip Benerjee, PhD, served in research departments at several companies, including SmithKline Beckman. Benerjee was employed at Eastman Pharmaceuticals from January 1986 until the incorporation of Banmax on Jan. 14, 1987. While at Eastman, Banerjee was director of project management. Banerjee was also assistant director of pharmaceutical research at Menley & James Labs, the OTC division of SmithKline Beckman, from August 1983 to January 1986. Banerjee also has worked at Abbott Labs and Hoffmann-LaRoche. SmithKline announced in November 1986 that it was getting out of the generics business and that it was discontinuing its SK-Line in order to focus on the development and marketing of innovative products. Pfizer, in a similar move last July, discontinued its Pfipharmecs generic business ("The Pink Sheet" March 23, p. 8). Banmax funded the acquisition of the generics through a $350,000 bank loan, the prospectus states. Banmax made a cash deposit of $50,000 and issued a letter of credit for $300,000 to Smith Kline & French. The company said it expects the loan to be repaid from the proceeds of the offering. Banmax expects to raise $3.32 mil. The proceeds from the offering will go towards the lease of a 4,000 square foot research and office facility; research equipment; product development, testing and marketing; and working capital. The company also plans, within a year, to hire 10 sales representatives to market its generics to drug chains, wholesalers, distributors, hospitals, government institutions, and HMOs. The generic products purchased by Banmax are hydrochlorothiazide 25 and 50 mg tabs; chlordiazepoxide 5, 10 and 25 mg caps; imipramine 10, 25 and 50 tabs; propoxyphene 65 mg caps; propoxyphene compound with aspirin and caffeine; tolbutamide 500 mg tabs; azetacolamide 250 mg tabs; dimenhydrinate 50 mg tabs and liquid; sulfisoxazole 500 mg tabs; diphenhydramine 25 and 50 mg caps and liquid; meprobamate 200 and 400 mg tabs; and amitryptyline 10, 25, 50, 75, 100 and 150 mg tabs. The amitryptyline and meprobamate are not currently approved for marketing, the prospectus notes. FDA will require completion of a bioavailability study before amitryptyline can be marketed. Banmax intends to pursue the $50,000 three month study. Meprobamate needs additional reformulation work, which the firm may not pursue, the filing says. Banerjee noted that the company is currently negotiating to purchase other generic drugs that already have ANDA approvals. Acquisition of approved generic drugs is the first phase of Banmax' product development plan, the prospectus says. Banmax plans to incorporate the generics into the controlled release delivery system, Multiple Unit Particulate Systems (MUPS). In the second phase, Banmax hopes to develop oral and transdermal controlled release drugs requiring full NDAs. In a separate agreement, Banerjee, along with Ashvin Zaveri, a co-founder, secretary and director of Banmax, have entered into a letter of intent to acquire J.J. Balan, Inc., a New York City-based distributor of generic drugs, vitamins, and home health are procuts. J.J. Balan had 1986 sales of more than $10 mil., Banerjee said.

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