As filed with the Securities and Exchange Commission on January 7, 2000
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Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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BOSTON BIOMEDICA, INC.
(Exact Name of Registrant as Specified in Its Charter)
Massachusetts 04-2652826
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification Number)
375 West Street
West Bridgewater, Massachusetts 02379
(508) 580-1900
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
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Richard T. Schumacher
Boston Biomedica, Inc.
375 West Street
West Bridgewater, MA 02379
(508) 580-1900
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
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Copies to:
Steven R. London, Esquire
Brown, Rudnick, Freed & Gesmer
One Financial Center
Boston, Massachusetts 02111
Tel:(617) 856-8200
Fax:(617) 856-8201
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Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under Securities Act of 1933,
other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title Of Each Class Of Amount Proposed Proposed Maximum Amount Of
Securities To Be Registered To Be Maximum Aggregate Offering Registration Fee
Registered Offering Price Price(1)
Per Share(1)
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<S> <C> <C> <C> <C>
Common Stock, $.01 par value per share 633,306 shares (2) $2.875 $1,820,751.75 $480.68
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</TABLE>
(1) Calculated pursuant to Rule 457(c) under the Securities Act of 1933, as
amended, on the basis of the average of the bid and asked price of the
common stock of Boston Biomedica, Inc., as reported on the Nasdaq National
Market on January 6, 2000.
(2) Also registered hereunder are such presently indeterminable number of
additional shares of Common Stock as may be issued in the event of a
merger, consolidation, reorganization, recapitalization, stock dividend,
stock split or other similar change in Common Stock.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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Prospectus (Subject to Completion)
The information in this prospectus is not complete and may be changed. We have
filed a registration statement relating to the common stock with the United
States Securities and Exchange Commission. We may not sell the common stock
until the SEC declares that the registration statement is effective. This
prospectus is not an offer to sell the common stock and it is not seeking an
offer to buy the common stock in any state where the offer or sale is not
permitted.
BOSTON BIOMEDICA, INC.
Up to 633,306 Shares of Common Stock
This prospectus relates to the offer and sale of an aggregate of up to 633,306
shares of our common stock beneficially owned by the following selling
stockholders: Paradigm Group, L.L.C. ; National Securities; David Kavrell; Brian
Friedman; Craig Gould; Steven Rothstein; Robert Daskal and MdBio, Inc. Paradigm
Group, L.L.C. may offer and sell up to 425,000 shares of our common stock under
this prospectus upon the exercise of outstanding stock purchase warrants.
National Securities may offer and sell up to 75,000 shares of our common stock
under this prospectus upon the exercise of outstanding stock purchase warrants.
David Kavrell may offer and sell up to 15,000 shares of our common stock under
this prospectus upon the exercise of outstanding stock purchase warrants. Brian
Friedman may offer and sell up to 10,000 shares of our common stock under this
prospectus upon the exercise of outstanding stock purchase warrants. Craig Gould
may offer and sell up to 20,000 shares of our common stock under this prospectus
upon the exercise of outstanding stock purchase warrants. Steven Rothstein may
offer and sell up to 20,000 shares of our common stock under this prospectus
upon the exercise of outstanding stock purchase warrants. Robert Daskal may
offer and sell up to 10,000 shares of our common stock under this prospectus
upon the exercise of outstanding stock purchase warrants. MdBio, Inc. may offer
and sell up to 29,153 outstanding shares of our common stock under this
prospectus and an additional 29,153 shares of our common stock under this
prospectus upon the exercise of outstanding stock purchase warrants. The selling
stockholders may offer the common stock through public or private transactions,
at prevailing market prices, or at privately negotiated prices.
The common stock is traded on the Nasdaq National Market under the symbol
"BBII". On January 6, 2000, the last reported sale price of the common stock on
the Nasdaq National Market was $2.875 per share.
An investment in the common stock offered under this prospectus involves a high
degree of risk. See "Risk Factors" beginning on page 7.
<PAGE>
Neither the SEC nor any state securities commission has approved or disapproved
of these securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The date of this prospectus is
January 7, 2000.
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TABLE OF CONTENTS
SUMMARY........................................................................3
RISK FACTORS...................................................................7
WARNINGS REGARDING FORWARD-LOOKING STATEMENTS.................................13
USE OF PROCEEDS...............................................................13
SELLING STOCKHOLDERS..........................................................14
LEGAL MATTERS.................................................................15
EXPERTS.......................................................................15
WHERE YOU CAN FIND MORE INFORMATION...........................................15
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SUMMARY
This summary briefly describes our business and the proposed sale of shares
of our common stock.
About Boston Biomedica
We are a leading worldwide provider of proprietary quality control products
for use with in vitro diagnostic test kits for the detection, analysis and
monitoring of infectious diseases, including AIDS, Hepatitis and Lyme Disease.
These products are used to develop test kits, to permit the monitoring of
laboratory equipment and personnel, and to help ensure the accuracy of test
results. Our products are derived from human plasma and serum using proprietary
manufacturing processes. We believe our Quality Control Panel products are
viewed as the current industry standard for the independent assessment of the
performance of HIV and Hepatitis test kits. We also manufacture diagnostic test
kit components and provide specialty laboratory services, including clinical
trials.
We sell our products primarily to test kit manufacturers and regulatory
agencies, but we also sell quality control products directly to the emerging
end-user market for quality control products for infectious disease test kits.
Our customers include Abbott Diagnostics, Boehringer Mannheim, Chiron,
Fujirebio, Hoffman LaRoche, Ortho Diagnostics (Johnson & Johnson) and Sanofi
Diagnostics; regulatory agencies such as the United States FDA (Food and Drug
Administration), the British Public Health Laboratory Service, the French
Institut National de la Transfusion Sanguine and the German Paul Ehrlich
Institute; and end-users of diagnostic test kits, such as blood banks, hospitals
and clinical laboratories. We sell our products to our customers pursuant to
purchase orders for discrete purchases and not pursuant to long-term contracts.
We offer two broad product classes used in in vitro diagnostics ("IVD"):
"Diagnostic Products" consisting of Quality Control Panels, Accurun (R) Run
Controls and Diagnostic Components, all used in connection with infectious
disease testing, and "Laboratory Instruments". Diagnostic Products are used
throughout the entire test kit life cycle, from initial research and
development, through the regulatory approval process and test kit production, to
training, troubleshooting and routine use by end-users. Our Quality Control
Panels, which combine human blood specimens with comprehensive quantitative data
useful for comparative analysis, help ensure that test kits detect the correct
analyte (specificity), detect it the same way every time (reproducibility), and
detect it at the appropriate levels (sensitivity). Our Accurun(R) Run Controls
enable end-users of test kits to confirm the validity of results by monitoring
test performance, thereby minimizing false negative test results and improving
error detection. In addition, we provide Diagnostic Components, which are custom
processed human plasma and serum products, to test kit manufacturers.
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Our specialty clinical laboratory services include both routine and
sophisticated infectious disease testing in microbiology, immunology and
molecular biology. We focus our specialty laboratory services in advanced areas
of infectious disease testing, and provide contract research and clinical trials
for domestic and foreign test kit manufacturers.
We operate an independent specialty clinical reference laboratory through
our wholly owned subsidiary, BBI Clinical Laboratories, Inc., to perform both
routine and sophisticated infectious disease testing, with special emphasis in
AIDS, Viral Hepatitis and Lyme Disease. Our specialty clinical laboratory
combines traditional microbiology, advanced immunology, and current molecular
diagnostic techniques to detect and identify microorganisms, their antigens and
related antibodies, and their nucleic acids. Our customers include blood banks,
physicians, clinics, hospitals and other clinical/research laboratories.
We offer a variety of contract research services through our wholly owned
subsidiary, BBI Biotech Research Laboratories, Inc., in molecular biology, cell
biology and immunology. We provide these services to governmental agencies,
diagnostic test kit manufacturers and biomedical researchers. Molecular biology
services include DNA sequencing, recombinant DNA support, probe labeling and
custom PCR (Polymerase Chain Reaction) assays. Cell biology and immunology
services include sterility testing, virus infectivity assays, cultivations of
virus or bacteria from clinical specimens, preparation of viral or bacterial
antigens or nucleic acids, and production of antibodies.
We also support domestic and foreign test kit manufacturers by conducting
clinical trials that allow them to collect data for submission to the United
States FDA and other regulatory agencies. By providing this service, we are able
to maintain close contact with test kit manufacturers and regulators, and we are
able to evaluate new technologies in various stages of development. We believe
that the reputation of our laboratory and scientific staff, our large number of
Quality Control Panels, and our inventory of characterized serum and plasma
specimens assist us in marketing our clinical trial services to our customers.
We also design, develop, manufacture and market laboratory instrumentation
for hospitals, clinics, laboratories and diagnostic companies through our wholly
owned subsidiary, BBI Source Scientific, Inc. These services range in complexity
from consulting to full system development and distribution. We also provide
after-sales-service, which we believe to be a major marketing advantage in many
of our markets, since many of our customers do not maintain their own full
service departments.
Bioseq, Inc., our wholly owned subsidiary, is a development stage company
with patent pending technology based on pressure cycling technology. Our
pressure cycling technology research is focused in two areas: nucleic acid
extraction and purification of target nucleic acids in connection with sample
preparation for molecular testing; and pathogen inactivation in blood plasma for
transfusion.
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Through our drug discovery and development efforts we have formed a new
wholly owned subsidiary, Panacos Pharmaceuticals, Inc.. We intend to "spin-off"
Panacos and eventually become a minority shareholder. We believe that by
separating Panacos from Boston Biomedica we will be able to attract the
significant capital required to develop their technology which was originally
discovered in collaboration with Dr. K.H. Lee of the School of Pharmacy at the
University of North Carolina at Chapel Hill.
We were organized in Massachusetts in 1978, but we did not commence
significant operations until 1986. Our principal executive offices are located
at 375 West Street, West Bridgewater, Massachusetts 02379. Our telephone number
is (508) 580-1900.
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The Offering
The following selling stockholders may offer and sell up to 633,306 shares
of our common stock under this prospectus: Paradigm Group, L.L.C.; National
Securities; and MdBio, Inc. We will not receive any proceeds from those sales or
transfers. The 633,306 shares of our common stock that we are registering under
this prospectus are comprised of: an aggregate of up to 500,000 shares of our
common stock that may be issued to Paradigm Group and its transferees upon the
conversion of outstanding stock purchase warrants; an aggregate of up to 75,000
shares of our common stock that may be issued to National Securities and its
transferees upon the conversion of outstanding stock purchase warrants; 29,153
outstanding shares of our common stock beneficially owned by MdBio, Inc.; and an
aggregate of up to 29,153 additional shares of our common stock that may be
issued to MdBio, Inc. upon the conversion of outstanding stock purchase
warrants.
Paradigm Group obtained its stock purchase warrants in connection with its
investment in Boston Biomedica. The total purchase price for the warrants was
$50,000. Certain of the warrants evidence the right to purchase an aggregate of
400,000 shares of our common stock at an exercise price of $4.25 per share and
the balance of the warrants evidence the right to purchase an aggregate of
100,000 shares of our common stock at an exercise price of $5.25 per share.
Paradigm Group's warrants expire on February 18, 2000. We prepared this
prospectus to satisfy the registration rights we granted to Paradigm Group in
connection with its investment.
National Securities received its stock purchase warrants as a fee for
services rendered in connection with Paradigm Group's investment in Boston
Biomedica. National Securities may exercise warrants to purchase up to 40,000
shares of our common stock at an exercise price of $4.25 per share and warrants
to purchase up to 25,000 shares of our common stock at an exercise price of
$8.00 per share in connection with Paradigm Group's exercise of its warrants. In
addition, National Securities may exercise warrants to purchase up to 10,000
shares of our common stock at an exercise price of $5.25 per share. National
Securities' warrants expire on August 15, 2001.
MdBio, Inc., received 29,153 stock units in connection with its award of
$175,000 to Boston Biomedica under a manufacturing incentive program that MdBio
instituted. Each stock unit consists of one share of our common stock and a
warrant to purchase one additional share of our common stock at an exercise
price of $10.00 per share. MdBio's warrants expire on September 29, 2003.
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RISK FACTORS
The common stock that is offered with this prospectus involves a high degree of
risk. You should carefully consider the following risk factors in addition to
other information in this prospectus before deciding to purchase the common
stock.
Our growth could be adversely affected if an end-user market for quality control
products does not develop or if we cannot increase our sales to this market
We focus our product development and sales and marketing efforts on quality
control products for end-users of infectious disease test kits. Currently, most
quality control products for infectious disease test kits are sold to test kit
manufacturers and regulators. End-users of infectious disease test kits are
currently using quality control products only to a very limited extent. Our
strategy is based primarily upon significant growth in sales of quality control
products to the end-user market. End-users of infectious disease test kits may
not increase their use of quality control products, and we may not be able to
increase our sales of quality control products to such end-users. Clearance or
approval by the United States FDA will be necessary before quality control
products may be sold for clinical laboratory use rather than for research
purposes only. If the end-user market for quality control products does not
develop, or if we are unable to increase our sales to this market, our future
growth could be adversely affected.
We face competition in sales of our products and our specialty laboratory
services
In sales of both our products and our specialty laboratory services, we
experience substantial competition and the threat of competition from
established and potential competitors, most of which have greater financial,
manufacturing and marketing resources than we do. Competition for customers is
intense and depends principally on our ability to provide products of the
quality and in the quantity required by customers, as well as our ability to
provide sophisticated specialty laboratory services, at competitive prices. We
currently compete against independent reference laboratories, integrated plasma
collection and processing centers and manufacturers of quality controls and
other diagnostic components. Other manufacturers and other companies may enter
the market. The entrance of any other of these companies into the quality
control market for infectious disease test kits could materially and adversely
effect our business, particularly our ability to achieve our strategy to
capitalize on the end-user market for quality control products for infectious
disease test kits. In addition, certain of our products are derived from donors
with rare antibody characteristics. Competition for blood specimens from such
donors may increase, which may increase the cost of obtaining such specimens.
Such increased competition may adversely affect our business.
We depend on certain key personnel
Our success depends in large part upon our ability to attract and retain
highly qualified scientific and management personnel. We compete for such
individuals with other companies, academic institutions, government entities and
other organizations. We may not be successful in hiring or retaining requisite
personnel. Our failure to recruit and retain qualified scientific and management
personnel could have a material adverse effect on our business. None of our key
management or scientific personnel is subject to an employment agreement. The
loss of the services of any such key personnel, including Richard T. Schumacher,
our Chief Executive Officer, could have a material adverse effect on our
business. We maintain key person life insurance on certain of our officers,
including Mr. Schumacher, on whose life we have $10,000,000 of insurance.
Our future success depends in part on our ability to manage growth while we
increase production and broader distribution
Our future success depends in part on our ability to manage growth as we
increase our production capacity and broaden distribution of our products. To
compete effectively and manage future growth, if any, we must continue to
implement and improve our operational, financial and management information
systems, procedures and controls on a timely basis, and to expand, train,
motivate and manage our workforce. Our personnel, systems, procedures and
controls may not be adequate to support our future operations. Our failure to
implement new and improved existing operation, financial and
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management systems or to expand, train, motivate or manage employees could have
a material adverse effect on our business, operating results and financial
condition.
Fluctuations in our quarterly results of operations may negatively affect the
market price of our common stock
Our results of operations have been subject to quarterly fluctuations due
to a variety of factors, including customer purchasing patterns and seasonal
demand for laboratory testing services. In particular, our sales of quality
control products and diagnostic components typically have been highest in the
fourth quarter and lowest in the first quarter of each fiscal year. We believe
that our customers may expend end-of-year budget surpluses in the fourth
quarter, thereby causing our fourth quarter product sales to be higher at the
expense of the first quarter product sales. Moreover, the margins for our
different products and services vary, with quality control products generally
having the highest margins and contract research the lowest. Therefore, our
results may vary from period to period as a result of the mix of products and
services and the mix among products. As a result, quarterly results of
operations may not be indicative of future results of operations. Also
variations in our quarterly results of operations may affect the market price of
our common stock.
We may be unsuccessful in acquiring acceptable financing for future acquisitions
We intend to continue to pursue strategic acquisitions to expand our core
product line, strengthen our base in medical science and technology, and secure
new sources of blood supply. We are subject to various risks associated with an
acquisition strategy, including the risk that we will be unable to identify and
attract suitable acquisition candidates or to integrate and manage any acquired
business. We compete for acquisition candidates with companies which have
significantly greater financial and management resources than we do.
Acquisitions could place a significant burden on our management and operating
personnel. Implementing our expansion strategy may also require significant
capital resources. Capital is needed not only for acquisitions, but also for the
effective integration, operation and expansion of such businesses. We may need
to raise the capital through the issuance of long-term or short-term
indebtedness or the issuance of our securities in a private or public
transaction, which could result in dilution of existing equity positions,
increased interest and amortization expense or decreased income to fund future
expansion. Acceptable financing for future acquisitions may not be available and
we may be unable to achieve the integration of future acquisitions and expansion
of our existing business.
Operating losses realized from recently acquired subsidiaries could impair some
intangible assets
Over the past two and a half years we have completed two acquisitions: the
assets and certain liabilities of Source Scientific, Inc., to form BBI Source
Scientific, Inc. and all of the outstanding common stock of BioSeq, with the
name now changed to BBI BioSeq, Inc. Since acquiring these companies both have
realized significant operating losses. There can be no guarantee that either of
these companies will become profitable. As a result of both acquisitions, and in
accordance with appropriate accounting standards, we have recorded a significant
amount of goodwill, which may become impaired. Furthermore, as a result of these
unprofitable subsidiaries we have reported a net operating loss during 1998 and
1999, to date. If we continue to report consolidated losses the realizability of
certain tax assets could also become impaired.
Our early stage development subsidiary may not be able to commercialize its
products
We recently formed a subsidiary, Panacos Pharmaceuticals, Inc. Panacos was
founded in 1999 and is at an early stage of development. Panacos has not
completed the development of any products and, accordingly, has not begun to
market or generate revenues from the commercialization of its products.
Panacos's products, primarily in the development of antivirals and HIV vacine
assays, will require significant additional pre-clinical and clinical testing
and investment prior to commercialization. A commitment of substantial resources
by Panacos and its partners to conduct time-consuming research, pre-clinical
testing and clinical trials will be required if Panacos is to complete the
development of its portfolio of product candidates. We cannot assure that any of
Panacos's product candidates will successfully complete pre-clinical or clinical
testing, meet applicable regulatory standards, obtain required regulatory
approvals, be capable of being produced in commercial quantities at reasonable
costs, be successfully marketed or be competitive with other products on the
market. Most of Panacos's products are not expected to be commercially available
for a number of years.
We may have difficulty in obtaining certain raw materials
We manufacture our products from human plasma and serum which we obtain from
nonprofit and commercial blood centers, primarily in the United States, but also
from similar sources throughout the world. Certain of our products, including
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our seroconversion and performance panels, are comprised of unique and rare
plasma specimens obtained from individuals during the short period of time when
the disease markers of particular diseases are converting from negative to
positive. As a result, the quantity of any such panel is limited, so we must
replace such panels as they sell out with another panel comprised of specimens
equally unique and rare. Competition to obtain such specimens may increase,
which may increase the cost of obtaining such products. We may not continue to
be successful in obtaining a steady and adequate supply of the unique and rare
specimens of plasma and serum necessary for certain of our products. Our
inability to continue to obtain such specimens, or any significant delays in
obtaining such specimens, would have a material adverse effect on our business.
We depend on a few key customers
Our three largest customers accounted for an aggregate of approximately 20%
of our revenues in 1998, however the majority of our orders are based upon
purchase orders. . None of our customers are contractually committed to make
future product purchases from us. The loss of any major customer or a material
reduction in a major customer's purchases would have a material adverse effect
upon our business.
We are subject to stringent government regulation
The manufacture and distribution of medical devices, including products
that we manufacture that are intended for in vitro diagnostic use, are subject
to extensive government regulation in the United States and in other countries.
In the United States, the Food, Drug, and Cosmetic Act (FDCA) prohibits the
marketing of in vitro diagnostic products until they are either: approved or
cleared by the Food and Drug Administration (FDA), a process that is
time-consuming, expensive and uncertain; or exempt from the requirement for a
pre-market notification as defined by the Food and Drug Administration
Modernization Act of 1997 (the FDMA) and have undergone validation studies. Any
significant changes to the product that may affect its safety and effectiveness,
including new indications for use or major changes in the manufacturing process,
may necessitate additional FDA approval or clearance, or further validation
studies.
Our Accurun 1(R) Controls and 11 of our Accurun (R) Controls have been
cleared by the FDA. Many of our Accurun (R) Controls are exempt from the
requirement for a pre-market approval and have either been validated or are
scheduled for validation. Other quality control products that we manufacture
that are not part of the Accurun (R) product line are marketed "for research use
only" because they are not intended for use in diagnostic procedures. Our
labeling for these products limits their use to research purposes; however, it
is possible that some purchasers of these products use them for diagnostic
purposes despite our intended use. In these circumstances, the FDA could allege
that these products should have been cleared or approved by the FDA prior to
marketing and initiate enforcement action against us, which could have a
material adverse effect on our business. Failure to obtain, or delays in
obtaining, FDA clearances or approval would adversely affect our strategy of
capitalizing on the end-user market.
We believe that our quality control panels are not regulated by the FDA
because they are not intended for diagnostic purposes. We believe that our
diagnostic components, which are components of in vitro diagnostic products, may
be subject to certain regulatory requirements under the FDCA and other laws
administered by the FDA, but do not require that we obtain a premarket approval
or clearance. The FDA may not agree and may adopt a different interpretation of
the FDCA or other laws it administers. Such an interpretation could result in a
material adverse effect on our business.
In addition, both before and after clearance or approval, medical devices,
such as Accurun 1(R), are subject to certain export and import requirements
under the FDCA.
We are also subject to strict FDA Good Manufacturing Practices regulations
governing testing, control and documentation, and to other post-marketing
restrictions with respect to the manufacture of our medical device products.
Ongoing compliance with Good Manufacturing Practices and other applicable
regulatory requirements is monitored through periodic inspections by the
regulatory authorities. Failure to comply with Good Manufacturing Practices or
other regulatory requirements can result, among other consequences, in the
failure to obtain pre-market clearances or approvals, withdrawal of clearances
or approvals, total or partial suspension of product distribution, injunctions,
civil penalties, recall or seizure of products, and criminal prosecution, each
of which would have a material adverse effect on our business.
Laws and regulations affecting our products are in effect in many of the
countries, states and other jurisdictions in which we market or intend to market
our products. We may not be able to obtain required regulatory clearances or
approvals
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on a timely basis, or at all. Delays in receipt of or failure to obtain such
clearances or approvals, or the failure to comply with regulatory requirements
in these countries, states or other jurisdictions, could have a material adverse
effect on our business, financial condition and results of operations.
The manufacture and sale of human therapeutic and diagnostic products in
the U.S. and elsewhere are governed by a variety of statutes and regulations.
These laws require approval of manufacturing facilities, controlled research and
testing of products and government review and approval of a submission
containing manufacturing, preclinical and clinical data in order to obtain
marketing approval based on establishing the safety and efficacy of the product
for each use sought, including adherence to good manufacturing practices during
production and storage and control of marketing activities, including
advertising and labeling. The products currently under development by Panacos
will require significant development, preclinical and clinical testing and
investment of substantial funds prior to their commercialization. The process of
obtaining required approvals can be costly and time-consuming, and there can be
no assurance that future products will be successfully developed and will prove
to be safe and effective in clinical trials or receive applicable regulatory
approvals. Potential investors should be aware of the risks, problems, delays,
expenses and difficulties which may be encountered by Panacos in view of the
extensive regulatory environment which controls its business.
We are also subject to other national, state and local laws and
regulations, including those relating to the use and disposal of biohazardous,
radioactive and other hazardous substances and wastes. Failure to comply with
such laws and regulations could have a material adverse effect on our business,
financial condition and results of operations.
If foreign restrictions on importation of blood derivatives are imposed, they
would adversely effect our business
Sales outside the United States in 1998 represented approximately 15.7% of
our revenues for 1998. Foreign sales are primarily to Western Europe and Japan.
Concern over blood safety has led to movements in a number of European and other
countries to restrict the importation of blood and blood derivatives, including
antibodies. Such restrictions continue to be debated and additional restrictions
could be imposed in the future. If imposed, such restrictions could have a
material adverse effect on our business.
Our success depends on our ability to take advantage of technological change
The infectious disease test kit industry is characterized by rapid and
significant technological change and changes in customer requirements. As a
result, our success depends upon our ability to enhance our existing products
and to develop or acquire and introduce in a timely manner new products that
take advantage of technological advances and respond to customer requirements.
We may not be successful in developing and marketing such new products or
enhancements to our existing products on a timely basis and such products may
not adequately address the changing needs of the marketplace. Furthermore, rapid
technological development may result in products or services becoming obsolete
or noncompetitive before we recover our investment in research, development and
commercialization.
Our ability to compete depends on our ability to maintain the proprietary nature
of our technological products
None of our quality control products or diagnostic components have been
patented, and we do not intend to seek patent protection for such products. Our
ability to compete effectively with other companies depends in part on our
ability to maintain the proprietary nature of our technologies and products and
operate without infringing the rights of third parties. We rely primarily on a
combination of trade secrets and non-disclosure and confidentiality agreements,
and in certain limited circumstances, patents, to establish and protect our
proprietary rights in our technology and products. Others could independently
develop or otherwise acquire the same, similar or more advanced trade secrets
and know-how.
We have five United States patents jointly with the University of North
Carolina at Chapel Hill relating to compounds, pharmaceutical compositions and
therapeutic methods in connection with our drug discovery program at the
University of North Carolina at Chapel Hill. These issued patents may not
provide any competitive advantage or may be challenged, circumvented or
invalidated.
Third parties may be issued patents to or may otherwise acquire the rights
to, technology necessary or potentially useful to our business. Our success is
dependent in part upon our not infringing patents or other intellectual property
rights of third parties. Litigation relating to the infringement of the patents
or other intellectual property rights of others could result in substantial
costs. Litigation which could result in substantial costs to us may also be
necessary to enforce our intellectual
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property rights or to determine the scope and validity of the proprietary rights
of others. Any such substantial costs would have a material adverse effect on
our business.
Changes in the healthcare industry may adversely affect our business and our
customers' ability to receive reimbursement for our products and services
Political, economic and regulatory influences are subjecting the healthcare
industry in the United States to fundamental change. Although to date Congress
has failed to pass comprehensive health care reform legislation, we anticipate
that Congress and state legislatures will continue to review and assess
alternative healthcare delivery and payment systems and may in the future
propose and adopt legislation effecting fundamental changes in the healthcare
delivery system. We expect legislative debate to continue in the future. In
addition, the private sector has been changing the healthcare industry through
consolidations and alternatives in healthcare delivery systems. We cannot
predict what impact the adoption of any federal or state healthcare reform
measures or future private sector reform may have on our industry or business.
In both domestic and foreign markets, our customers' sales of products and
services that incorporate or affect the demand for our products may depend in
part on the availability of reimbursement from third-party payors such as
government health administration authorities, private health insurers and other
organizations. Third-party payors are increasingly challenging the price and
cost-effectiveness of medical products and services. Pricing pressures that our
customers experience may adversely affect us because customers may determine
that our products are no longer cost effective or because customers may no
longer receive adequate third-party reimbursements. In addition, where the payor
for our specialty laboratory services is the patient rather than third-party
payors, we face a greater risk of non-payment.
Claims of hazardous waste damages or product liability could expose us to
substantial liabilities and expenses
Our manufacturing processes involve the controlled use of biohazardous
materials and chemicals. We cannot completely eliminate the risk of accidental
contamination or injury from these materials. In the event of such an accident,
we could be held liable for any damages that result, and any such liability
could exceed our resources. We may incur substantial costs to maintain safety in
the use of biohazardous materials and to comply with environmental regulations
as we further develop our manufacturing capacity.
Further, our business exposes us to liability risks that are inherent in
the testing, manufacturing and marketing of our products. We do not currently
have product liability insurance. Product liability claims could expose us to
substantial liabilities and expenses, which could materially and adversely
affect our business.
We have significant foreign sales and we are exposed to the risks of currency
fluctuation
We have generated significant sales outside the United States and
anticipate that foreign sales will continue to account for a significant
percentage of our net revenues. Our foreign sales accounted for approximately
16% of our total revenues for the year ended December 31, 1998. We are therefore
subject to risks associated with foreign sales, including Untied States and
foreign regulatory requirements and policy changes, political and economic
instability, difficulties in accounts receivable collection, difficulties in
managing distributors or representatives and seasonality of sales. Although our
sales and receivables are denominated in United States dollars, the value of the
United States dollar in relation to foreign currencies may also adversely affect
our sales to foreign customers. To the extent that we expand our international
operations or change our pricing practices to denominate prices in foreign
currencies, we will be exposed to increased risks of currency fluctuation.
Insiders control a significant percentage of voting power
Richard T. Schumacher, Chief Executive Officer, his relatives, and our
other existing officers and directors collectively have voting control over
approximately 35% of the outstanding shares of common stock. Accordingly, these
stockholders, should they choose to act in concert, are in a position to
exercise a significant degree of control and to significantly influence
stockholder votes on the election of directors, increasing the authorized
capital stock, mergers, and sales of assets.
Anti-takeover provisions in our charter and by-laws may discourage third-parties
from pursuing a takeover
Certain provisions of our Amended and Restated Articles of Organization and
Restated Bylaws could have the effect of discouraging a third party from
pursuing a non-negotiated takeover and preventing certain changes in control.
These
11
<PAGE>
provisions include a classified board of directors, a fair price provision,
advance notice to the board of directors of stockholder proposals and
stockholder nominees for the board of directors, limitations on the ability of
stockholders to remove directors and call stockholders meetings, the provision
that vacancies on the board of directors be filled by a majority of the
remaining directors and the ability of the board to issue, without further
stockholder approval, preferred stock with rights and privileges which could be
senior to the common stock. We are also subject to Chapter 110F of the
Massachusetts General Laws which, subject to certain exceptions, prohibits a
Massachusetts corporation from engaging in any of a broad range of business
combinations with any "interested stockholder" for a period of three years
following the date that such stockholder became an interested stockholder. These
provisions could discourage a third party from pursuing a takeover at a price
considered attractive by many stockholders, since such provisions could have the
effect of preventing or delaying a potential acquiror from acquiring control.
Year 2000 Readiness
Our Year 2000 program is designed to minimize the possibility of serious
Year 2000 interruption. Possible Year 2000 worst case scenarios include the
interruption of significant parts of our business as a result of internal
business system failure or the failure of the business systems of its suppliers,
distributors or customers. Any such interruption may have a material adverse
impact on our future results. Although no significant problems have been noted
to date, we acknowledge that there is still risk that such problems may exist.
RECENT ACCOUNTING DEVELOPMENTS
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements", issued in December 1999, summarizes certain of the staff's views in
applying generally accepted accounting principles to revenue recognition in
financial statements. The statements in the staff accounting bulletins represent
interpretations and practices followed by the Division of Corporation Finance
and the Office of the Chief Accountant in administering the disclosure
requirements of the Federal securities laws. The impact of this Staff Accounting
Bulletin is currently being reviewed by the Company.
Staff Accounting Bulletin No. 100, "Restructuring and Impairment Charges",
issued in November 1999, expresses views of the staff regarding the accounting
for and disclosure of certain expenses commonly reported in connection with exit
activities and business combinations. This includes accrual of exit and employee
termination costs pursuant to Emerging Issues Task Force (EITF) Issues No. 94-3,
Liability Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity (Including Certain Costs Incurred in a Restructuring), and
No. 95-3, Recognition of Liabilities in Connection with a Purchase Business
Combination, and the recognition of impairment charges pursuant to Accounting
Principles Board (APB) Opinion No. 17, Intangible Assets, and Statement of
Financial Accounting Standards (SFAS) No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of. In accordance
with Staff Accounting Bulletin No. 100, the value of the Company's intangible
and goodwill assets related to its instrument business, will be carefully
reviewed to see if there is any impairment as of December 31, 1999. Seperately,
in light of the Company's continuing consolidated losses from operations, the
Company will be evaluating the carrying value of its deferred tax asset.
12
<PAGE>
WARNINGS REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus under "Summary" and "Risk
Factors," and in the documents incorporated by reference, are forward-looking
made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. In essence, forward-looking statements are predictions of
future events. Although we would not make forward-looking statements unless we
believe we have a reasonable basis for doing so, we cannot guarantee their
accuracy, and actual results may differ materially from those we anticipated due
to a number of uncertainties, many of which we are not aware. We urge you to
consider the risks and uncertainties discussed under "Risk Factors" and in the
other documents filed with the SEC that we have referred you to in evaluating
our forward-looking statements.
You should understand also that we have no plans to update our forward-looking
statements. Our forward-looking statements are accurate only as of the date of
this prospectus, or in the case of forward-looking statements in documents
incorporated by reference, as of the date of those documents.
We identify forward-looking statements with the words "plan," "expect,"
"anticipate," "estimate," "will," "should" and similar expressions. Examples of
our forward-looking statements may include statements related to:
- our plans, objectives, expectations and intentions;
- the timing of, availability, cost of development and functionality of
products under development or recently introduced; and
- the anticipated markets for our products and the success of our
products in those markets.
USE OF PROCEEDS
We will not receive any proceeds from the selling stockholders' sale of our
common stock being registered under this prospectus.
13
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth information regarding the beneficial
ownership of our common stock by the selling stockholders as of January 6, 2000
and as adjusted to reflect the sale or transfer by the selling stockholders of
the shares of our common stock being registered under this prospectus, including
the sale or transfer of shares of our common stock underlying warrants held by
the selling stockholders. This information is based upon information received
from or on behalf of Paradigm Group, L.L.C., National Securities, David
Kavrell, Brian Friedman, Craig Gould, Steven Rothstein, Robert Daskal and
MdBio, Inc.
Shares Beneficially Number of Shares Beneficially
------------------- --------- -------------------
Owned Shares Being Owned After
----- ------------ -----------
Prior to Offering Offered Offering
----------------- ------- --------
Name of Securityholder Number Percent Number Number Percent
----------- --------- ------------ -------- ---------
Paradigm Group, L.L.C. 425,000 (1) 8.18% 425,000 (1) 0 0%
National Securities 75,000 (2) 1.55% 75,000 (2) 0 0%
David Kavrell 15,000 (3) .31% 15,000 (3) 0 0%
Brian Friedman 10,000 (4) .21% 10,000 (4) 0 0%
Craig Gould 20,000 (5) .42% 20,000 (5) 0 0%
Steven Rothstein 20,000 (6) .42% 20,000 (6) 0 0%
Robert Daskal 10,000 (7) .21% 10,000 (7) 0 0%
MdBio, Inc. 58,306 (8) 1.21% 58,306 (8) 0 0%
- ------------------
* Less than 1%.
(1) Consists of warrants to purchase an aggregate of 425,000 shares of our
common stock.
(2) Consists of warrants to purchase an aggregate of 75,000 shares of our
common stock.
(3) Consists of warrants to purchase an aggregate of 15,000 shares of our
common stock.
(4) Consists of warrants to purchase an aggregate of 10,000 shares of our
common stock.
(5) Consists of warrants to purchase an aggregate of 20,000 shares of our
common stock.
(6) Consists of warrants to purchase an aggregate of 20,000 shares of our
common stock.
(7) Consists of warrants to purchase an aggregate of 10,000 shares of our
common stock.
(8) Consists of stock units comprised of 29,153 shares of our common stock and
warrants to purchase an additional 29,153 shares of our common stock.
14
<PAGE>
LEGAL MATTERS
For the purpose of this offering, Brown, Rudnick, Freed & Gesmer, Boston,
Massachusetts, will pass upon the validity of the shares of common stock in the
offering.
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Annual Report on Form 10-K for the year ended December 31, 1998, have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC . You may read and copy any document we file at the
SEC's public reference rooms at 450 Fifth Street, N.W., Washington, D.C., 20549,
in Chicago, Illinois and in New York, New York. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public on the SEC's website at
http://www.sec.gov.
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act of 1933, as amended, with respect to the common stock offered in
connection with this prospectus. This prospectus does not contain all of the
information set forth in the registration statement. We have omitted parts of
the registration statement in accordance with the rules and regulations of the
SEC. For further information with respect to us and our common stock, you should
refer to the registration statement. Statements contained in this prospectus as
to the contents of any contract or other document are not necessarily complete
and, in each instance, you should refer to the copy of the contract or document
filed as an exhibit to or incorporated by reference in the registration
statement. Each statement as to the contents of any contract or document is
qualified in all respects by reference to the contract or document itself. You
may obtain copies of the registration statement from the SEC's principal office
in Washington, D.C. upon payment of the fees prescribed by the SEC, or you may
examine the registration statement without charge at the offices of the SEC
described above.
The SEC allows us to "incorporate by reference" the information that we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the following documents:
15
<PAGE>
- Our Annual Report on Form 10-K for the fiscal year ended December 31,
1998;
- Our Quarterly Reports on Form 10-Q for the fiscal quarters ended March
31, 1999, June 30, 1999 and September 30,1999; and
- The description of our common stock contained in our Registration
Statement on Form 8-A dated October 25, 1996.
We also incorporate by reference any future filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended, prior to the termination of the offering to which this prospectus
relates.
You may request a copy of any or all of these filings, at no cost, by writing or
telephoning us at the following address:
Boston Biomedica, Inc.
375 West Street
West Bridgewater, MA 02379
(508) 580-1900
Attn: Investor Relations
You should rely only on the information contained in this document (or any
supplement) or that we have referred you to. We have not authorized anyone else
to provide you with different information. You should not assume that the
information in this prospectus or any supplement is accurate as of any date
other than the date on the front of those documents.
16
<PAGE>
This prospectus is part of a
registration statement we filed
with the SEC. You should rely
only on the information or
representations provided in this
prospectus. We have authorized no BOSTON BIOMEDICA, INC.
one to provide you with different
information. The selling
stockholders described in this
prospectus are not making an offer
in any jurisdiction where the offer Up to 633,306 Shares of Common Stock
is not permitted. You should not
assume that the information in this
prospectus is accurate as of any date
other than the date of this prospectus.
PROSPECTUS
January 7, 2000
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the various expenses payable by us in connection
with the sale and distribution of the securities registered hereby. All amounts
are estimated except the SEC and Nasdaq filing fee. We will bear all of the
costs of issuance and distribution as follows:
SEC Registration Fee......................... $481
Nasdaq Filing Fee............................ $12,000
Accounting Fees and Expenses................. $10,000
Legal Fees and Expenses...................... $11,000
Costs of Printing and Engraving $500
Miscellaneous................................ $1,019
----
Total............................... $35,000
Item 15. Indemnification of Directors and Officers
Our Amended and Restated By-Laws include provisions to permit the
indemnification of our officers and directors for damages arising out of the
performance of their duties unless such damages arise out of the officer's or
director's failure to exercise his duties and to discharge the duties of his
office in good faith and in the reasonable belief that his action was in, or not
opposed to, the best interest of the Company, and with respect to any criminal
action or proceeding, do not have reasonable cause to believe that his conduct
was unlawful. We intend to enter into indemnification contracts with each of our
directors and officers.
II-1
<PAGE>
Item 16. Exhibits
<TABLE>
<CAPTION>
Exhibit
Number
- -------
<S> <C> <C>
4.1 Description of certificate for shares of Boston Biomedica common stock *
4.2 Form of Warrant Certificate **
5.1 Legal Opinion of Brown, Rudnick, Freed & Gesmer, P.C. filed herewith
23.1 Consent of PricewaterhouseCoopers LLP filed herewith
23.2 Consent of Brown, Rudnick, Freed & Gesmer, P.C. (included in Exhibit 5.1) filed herewith
24.1 Power of Attorney (contained on page II-6 hereof) filed herewith
- ----------
</TABLE>
*The above exhibit was previously filed as an exhibit of the same number to our
Registration Statement on Form S-1 (Registration No. 333-10759), as amended,
filed on August 23, 1996 and is incorporated herein by reference.
**The above exhibit was previously filed as Exhibit number 4.3 to our Quarterly
Report on Form 10-Q for the period ended September 30, 1999, and is incorporated
herein by reference.
II-2
<PAGE>
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(g) Not applicable.
(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be governed by
the final adjudication of such issue.
(i) Not applicable.
(j) Not applicable.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of West Bridgewater, Commonwealth of Massachusetts, on
January 7, 2000.
BOSTON BIOMEDICA, INC.
By: /s/Richard T. Schumacher
--------------------------
Richard T. Schumacher,
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Richard T. Schumacher, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto
and other documents in connection therewith, and, in connection with any
registration of additional securities pursuant to Rule 462(b) under the
Securities Act of 1933, to sign any abbreviated registration statement and any
and all amendments thereto, and to file the same, with all exhibits thereto and
other documents in connection therewith, in each case, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitute, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
Signature Title Date
--------- ----- ----
/s/Richard T. Schumacher Director and Chief Executive January 7, 2000
- --------------------------------------------
Richard T. Schumacher Officer
/s/Kevin W. Quinlan Director and President January 7, 2000
- --------------------------------------------
Kevin W. Quinlan
/s/Francis E. Capitanio Director January 7, 2000
- --------------------------------------------
Francis E. Capitanio
/s/Calvin A. Saravis Director January 7, 2000
- --------------------------------------------
Calvin A. Saravis
/s/William R. Prather Director Principal Financial and January 7, 2000
- --------------------------------------------
William R. Prather Accounting Officer
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number
<S> <C> <C>
4.1 Description of certificate for shares of Boston Biomedica common stock *
4.2 Form of Warrant Certificate **
5.1 Legal Opinion of Brown, Rudnick, Freed & Gesmer, P.C. filed herewith
23.1 Consent of PricewaterhouseCoopers LLP filed herewith
23.2 Consent of Brown, Rudnick, Freed & Gesmer, P.C. (included in Exhibit 5.1) filed herewith
24.1 Power of Attorney (contained on page II-6 hereof) filed herewith
- ----------
</TABLE>
*The above exhibit was previously filed as an exhibit of the same number to our
Registration Statement on Form S-1 (Registration No. 333-10759), as amended,
filed on August 23, 1996 and is incorporated herein by reference.
**The above exhibit was previously filed as Exhibit number 4.3 to our Quarterly
Report on Form 10-Q for the period ended September 30, 1999, and is incorporated
herein by reference.
#844864 v\1 - searlejr - $3wg01!.doc_ - 11563/12
E-1
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 24, 1999, except as to
certain information in the first paragraph of Note 9, for which the date is
March 31, 1999, relating to the consolidated financial statements and financial
statement schedule, which appears in Boston Biomedica, Inc.'s Annual Report on
Form 10-K for the year ended December 31, 1998. We also consent to the reference
to us under the heading "Experts" in such Registration Statement.
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 7, 2000
<PAGE>
January 7, 2000
Boston Biomedica, Inc.
375 West Street
West Bridgewater, MA 02379
Attn: Richard T. Schumacher, Chief Executive Officer
RE: Registration Statement on Form S-3 filed on January 7, 2000
Ladies and Gentlemen:
We have acted as counsel to Boston Biomedica, Inc., a Massachusetts
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission of a Registration Statement on Form S-3
(the "Registration Statement") pursuant to which the Company is registering
under the Securities Act of 1933, as amended (the "Act"), a total of 633,306
shares of common stock, $.01 par value (the "Shares"), issuable upon exercise of
outstanding warrants of the Company (the "Warrants"). This opinion is being
rendered in connection with the filing of the Registration Statement.
In connection with this opinion, we have examined the following documents
(collectively, the "Documents"):
(i) the Amended and Restated Articles of Incorporation of the Company;
(ii) the Amended and Restated By-laws of the Company;
(iii) the corporate minute books and other records of the Company;
(iv) the Warrant Purchase Agreement dated August 18, 1999, by and between
the Company and Paradigm Group, L.L.C. (the "Warrant Purchase
Agreement");
(v) a form of Warrant, the terms of which we assume to be substantially
similar to the terms of all the Warrants; and (vi) the Registration
Statement.
We have, without independent investigation, relied upon the representations
and warranties of the various parties as to matters of objective fact contained
in the Documents.
We have not made any independent review or investigation of orders,
judgments, rules or other regulations or decrees by which the Company or any of
its property may be bound, nor have we made any independent investigation as to
the existence of actions, suits, investigations or proceedings, if any, pending
or threatened against the Company.
The opinions expressed herein are based solely upon (i) our review of the
Documents, (ii) discussions with Richard T. Schumacher, the Chairman of the
Board and Chief Executive Officer of the Company, (iii) discussions with those
of our attorneys who have devoted substantive attention to the
<PAGE>
Boston Biomedica, Inc.
January 7, 2000
Page 2
matters contained herein, and (iv) such review of published sources of law as we
have deemed necessary.
This firm, in rendering legal opinions, customarily makes certain
assumptions which are described in Schedule A hereto. In the course of our
representation of the Company in connection with the preparation of the
Registration Statement, nothing has come to our attention which causes us to
believe reliance upon any of those assumptions is inappropriate, and, with your
concurrence, the opinions hereafter expressed are based upon those assumptions.
We express no legal opinion upon any matter other than those explicitly
addressed in numbered paragraph 1 and 2 below, and our express opinions therein
contained shall not be interpreted to be an implied opinion upon any other
matter.
Our opinions contained herein are limited to the laws of the Commonwealth
of Massachusetts and the Federal law of the United States of America.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Warrants have been duly authorized and validly issued, and are fully
paid and non-assessable.
2. The Shares have been duly authorized and, when issued and delivered in
accordance with the terms of the Warrants and the Warrant Purchase Agreement,
will be validly issued, fully paid and non-assessable.
We understand that this opinion is to be used in connection with the
Registration Statement. We consent to the filing of this opinion as an Exhibit
to said Registration Statement and to the reference to our firm wherever it
appears in the Registration Statement, including the prospectus constituting a
part thereof and any amendments thereto. This opinion may be used in connection
with the offering of the Shares only while the Registration Statement, as it may
be amended from time to time, remains effective under the Act.
Very truly yours,
BROWN, RUDNICK, FREED & GESMER
By: BROWN, RUDNICK, FREED & GESMER,
P.C., a Partner
By: /s/ Steven R. London
---------------------------
Steven R. London, A Member
Duly Authorized
SRL/DHM/MRF
<PAGE>
Boston Biomedica, Inc.
January 7, 2000
Page 3
SCHEDULE A
BROWN, RUDNICK, FREED & GESMER
STANDARD ASSUMPTIONS
--------------------
In rendering legal opinions in third party transactions, Brown, Rudnick,
Freed & Gesmer makes certain customary assumptions described below:
1. Each natural person executing any of the Documents has sufficient
legal capacity to enter into such Documents and perform the
transactions contemplated thereby.
2. The Company holds requisite title and rights to any property involved
in the transactions described in the Documents and purported to be
owned by it.
3. Each person other than the Company has all requisite power and
authority and has taken all necessary corporate or other action to
enter into those Documents to which it is a party or by which it is
bound, to the extent necessary to make the Documents enforceable
against it.
4. Each person other than the Company has complied with all legal
requirements pertaining to its status as such status relates to its
rights to enforce the Documents against the Company.
5. Each Document is accurate, complete and authentic, each original is
authentic, each copy conforms to an authentic original and all
signatures are genuine.
6. All official public records are accurate, complete and properly
indexed and filed.
7. There has not been any mutual mistake of fact or misunderstanding,
fraud, duress, or undue influence by or among any of the parties to
the Documents.
8. The conduct of the parties to the transactions described in the
Documents has complied in the past and will comply in the future with
any requirement of good faith, fair dealing and conscionability.
9. Each person other than the Company has acted in good faith and without
notice of any defense against the enforcement of any rights created
by, or adverse claim
<PAGE>
Boston Biomedica, Inc.
January 7, 2000
Page 4
to any property or security interest transferred or created as part
of, the transactions described in the Documents.
10. There are no agreements or understandings among the parties to or
bound by the Documents, and there is no usage of trade or course of
prior dealing among such parties, that would define, modify, waive, or
qualify the terms of any of the Documents.
11. The Company will not in the future take any discretionary action
(including a decision not to act) permitted under any Document that
would result in a violation of law or constitute a breach or default
under that or any other Document or court or administrative orders,
writs, judgments and decrees that name the Company and are
specifically directed to it or its property.
12. The Company will obtain all permits and governmental approvals not
required at the time of the closing of the transactions contemplated
by the Documents but which are subsequently required, and will take
all actions similarly required, relevant to subsequent consummation of
the transactions contemplated by the Documents or performance of the
Documents.
13. All parties to or bound by the Documents will act in accordance with,
and will refrain from taking any action that is forbidden by, the
terms and conditions of the Documents.
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