HALSEY DRUG TARGETS $2 MIL. FOR PRODUCT DEVELOPMENT

HALSEY DRUG TARGETS $2 MIL. FOR PRODUCT DEVELOPMENT over the next 2-3 years, the generic drug manufacturer said in a recent prospectus detailing the company's $5 mil. inaugural public offering. The R&D total represents 27% of the firm's 1984 sales of $7.4 mil. Halsey's 1984 R&D expenditures were $57,890, the prospectus noted. Brooklyn, New York-based Halsey manufactures and sells 154 generic products made up of various dosages of 52 basic Rx drugs and 75 basic OTC drugs, most of which are sold under the firm's Blue Cross" label. According to the prospectus, the firm sells its products through four salaried employees and "to a lesser extent" through five independent commission sales reps who sell primarily to distributors, hospitals, government agencies, drug wholesalers and drug chains. Halsey explained that its principal objective is "to obtain FDA approval to market a new generic drug product by, or shortly after, the patent expiration date of the equivalent brand name drug in order to be among the first to market a new generic drug product." The company noted that applications to market 17 basic generic drugs in 26 dosage levels have been submitted to FDA. Halsey said it plans to seek FDA approval of various dosages for another 11 drugs. While some limited trading of Halsey stock has occurred since 1971, the prospectus said that as of December 1985 there were only 98 recorded shareholders. Approximately 70% of the stock is owned by the Marcus family, which also manages the company. Should the offering be fully subscribed, however, the Marcus interest would be reduced to 41.2% of outstanding shares, the prospectus explained. Under the terms set forth in the prospectus, 500,000 units, each consisting of four shares of common stock and two warrants, are to be offered at a maximum proposed price of $10 per unit. Each warrant, which entitles the holder to purchase one share of common stock, becomes exercisable one year from the date of the offering, not yet established. Muller and Company of New York City is the investment banker. Besides the $2 mil. earmarked for new generic product development, Halsey said it plans to spend $500,000 on capital equipment associated with production, and another $500,000 to reduce an outstanding bank loan, which matures at the end of January. Any remaining proceeds will be invested in short-term obligations, to be added to the firm's working capital, the prospectus noted.