Spokane biotech firm, Bio-Origyn hopes for rebirth

Bio-Origyn plans reorganization, quick resumption of production

A Spokane biotech firm has laid off six workers and hopes to reorganize and reopen its doors this month.

Tom Sowa
Staff writer Spokesman Review

Bio-Origyn, a privately held firm, shut down operations in June and laid off all but one part-time worker, company officers said Monday.

After shutting down, Bio-Origyn also stopped making the its key product, Pre-Seed, a lubricant designed to help infertile couples have babies.

Bio-Origyn hopes to resume production of Pre-Seed as quickly as possible using its Sandpoint manufacturer, said Keith MacGeagh, a Bio-Origyn board member.

Pre-Seed has collected intense popularity through word-of-mouth among couples trying to conceive.

The sudden shortage of Pre-Seed now has led to huge price spikes for packages of the product being sold on the Internet.

Normally selling at $20 for a package of six lubricant dispensers, packages of Pre-Seed have sold as high as $200 on eBay in recent weeks.

Co-founded by two Washington State University researchers, Bio-Origyn is also trying to develop a number of other biotech products, including one that extends the shelf life of human blood platelets.

The key current issue facing the company is the need to restructure what is currently a limited liability partnership, MacGeagh said.

MacGeagh is a principal with Spokane-based Jaguar Ventures, an investment agent for Metropolitan Mortgages and Securities.

Metropolitan has invested about $1million in Bio-Origyn and has about 20 percent ownership in the firm. The co-founders, Dr. Sylvia Oliver and Joanna Ellington, each own 40 percent.

Ellington has been the CEO since the company’s founding eight years ago.

Oliver has not participated in day-to-day operation of the company.

Another $300,000 from Metropolitan came in the form of a convertible loan to Bio-Origyn. As part of the restructuring, Metropolitan intends to convert that loan into a higher share of the firm.

Another issue will be an attempt to get a clear valuation of Bio-Origyn by an outside investor, MacGeagh said.

For that to happen, he said the principals realize the firm needs to become a C-corporation. C-corp. status is a better vehicle for encouraging investment, MacGeagh said.

Revenue is still coming in, however, from the final sales of Pre-Seed, according to MacGeagh. More than 100,000 units of Pre-Seed have been sold worldwide since it was introduced this year.

"We’d like to see this issue resolved by the end of October," he added. "We have a good product. There are orders we need to fill. A lot of people see this as very important in helping them have children."

Despite Pre-Seed’s success to date, the company has amassed more than $100,000 in bills and past-due accounts.

It owes Unicep Packaging, the Sandpoint manufacturer it uses, more than $20,000 for earlier work.

One of the difficulties preventing reorganization is a corporate bylaw requiring 66 percent agreement before changes can occur.

That will require all three shareholders to agree on any plan, and to date, agreement on how best to proceed has not been easy, MacGeagh said.

•Business writer Tom Sowa can be reached at (509) 459-5492 or by e-mail at [email protected].

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