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 LOS ANGELES, Oct. 13 /PRNewswire/ -- Harrier, Inc. (NASDAQ: HARE; Boston: HRR.B) said today that it has agreed in principle to merge, through the issuance of Harrier stock, with American Diagnostica, Inc. (ADI), a privately held company, in Greenwich, Conn., specializing in new drug development and the manufacturing and sale of specialty diagnostic products.
 Both companies have been engaged in a joint program since last May to develop and test new synthetic drugs using Harrier's proprietary glycosylation processes to modify and enhance the physical and biological properties of existing pharmaceuticals. The project is being conducted at ADI under the direction of Dr. Richard Hart, its founder, principal owner, and chief executive officer. Dr. Hart was elected to Harrier's board of directors in April 1993.
 Kevin DeVito, Harrier president, said: "Upon completion of the transaction, which is expected before year end, Harrier shareholders will own between 51 percent and 55 percent of the combined company depending on valuation studies and final negotiations.
 "The consolidation," Mr. DeVito continued, "will result in an operating entity that is growing rapidly, has in excess of $4.5 million in sales, a positive cash flow, an improved capital structure, and is more broadly positioned in health care and drug development with greater access to existing distribution systems in these markets."
 The closing of the transaction will be contingent on the signing of a definitive contract, approval by Harrier's board of directors, and certain other conditions and approvals.
 At June 30, 1993, Harrier had 8,436,780 shares outstanding. In addition to its involvement with ADI in the drug discovery and development field, the company markets a medical device, the Bioptron(R) Lamp, to consumers in the United States and is developing another unique medical device. Its wholly owned subsidiary, Pollution Reduction Technologies, Inc., owns exclusive rights in the Western Hemisphere to manufacture and market the Harrier Diesel Cleaner, a proprietary pollution control device that reduces diesel engine emissions.
 Background Information
 American Diagnostica Inc.
 A privately held, dynamic and profitable medical diagnostics marketing and development stage drug discovery company.
 American Diagnostica Inc. (ADI) commenced operations in 1983 and the husband and wife founders continue to own 98 percent of the outstanding stock. ADI is without debt or long-term liabilities. The company is the leading U.S. producer of specialty coagulation products used in the diagnosis of clotting and bleeding disorders, for the determination of the relative risk of heart attack, for bleeding diathesis and kindred blood function problems, and for the study of the related cancer proteases. ADI manufactures most of its broad product portfolio using unique reagents, following its proprietary processes; their distribution and use is regulated by the U.S. Food and Drug Administration and by similar regulatory agencies in other countries.
 In support of its drug discovery program, American Diagnostica Inc. has recently licensed proprietary, patented synthetic chemical processes from Harrier, Inc. Promising drug leads based on this technology now are moving into the pre-clinical testing phase.
 Annual sales for 1993 will amount to about $3.9 million, 14 percent ahead of those for 1992. The gross margin averages 70 percent. About 35 percent of sales income is expensed for research and development activities, directed to the development and documentation of breast cancer and leukemia prognostic products and to drug discovery research on tumor metastasis. Collaborative research agreements are maintained with some 10 universities and clinics, worldwide. Whenever possible all costs and purchases are expensed or if necessary amortized as rapidly as permissible (including patent and trademark costs).
 The financial strategy of ADI is to operate at break-even while providing maximal funding for its research and development projects.
 Domestic sales are 70 percent of total; the remainder being two-thirds to Western Europe via the Ortho Diagnostics subsidiaries of Johnson & Johnson, and one-third to Japan. In the United States and Canada ADI sells directly, in Australasia, via an affiliate company. Some 800 customer accounts are supplied; the top 20 customers accounting for less than 30 percent of sales. Receivables average 40 days. About 55 percent of direct sales are to hospitals and clinics, for patient diagnosis and management; the balance being to diagnostics manufacturers via license and supply agreements and to the research-based pharmaceutical industry.
 Twenty-five persons are employed, their numbers equally divided among R&D production, marketing and administration functions. The company occupies new premises of 8,000 square feet under a long-term lease.
 The business strategy of the company is to utilize operating income, to continue its drug discovery and product development in cancer research and prognosis.
 -0- 10/13/93
 /CONTACT: Kevin DeVito, president and CEO of Harrier, Inc., 310-376-7721/

CO: Harrier, Inc.; American Diagnostica, Inc. ST: California, Connecticut IN: MTC SU: TNM

CK-PS -- NY065 -- 1729 10/13/93 13:30 EDT
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Publication:PR Newswire
Date:Oct 13, 1993

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