Sergei Pugachev, through a recently created U.S. subsidiary of his Luxembourgh-based OPK Luxadvor SA, acquired the lion’s share of Biopure’s remaining assets with a $4.05 million bid during an Aug. 18 bankruptcy court auction in Boston.
Included in the sale were patents and other intellectual property connected with the company’s Hemopure artificial blood compound. According to court documents, OPK and BIPACO LLC — a Boston-based limited liability company created Aug. 6 by Wong Tak Lin, a Hong Kong businessman — traded bids across 10 rounds during the seven-hour auction last week. BIPACO’s top bid was $4 million.
OPK Biotech, the Delaware-domiciled entity created in June to acquire Biopure’s assets, also put in a $850,000 bid for the company’s 50-percent stake in Eleven Hurley Street Associates, a real estate partnership that owns the Company’s principal office and research and development facilities. A hearing is scheduled Sept. 3 to finalize the EHSA sale.
Also bidding on the EHSA partnership was Cambridge, Mass.-based developer Varney Hintlian, through his Tarvis Realty Trust. Hintlian’s top bid was $800,000, according to court documents.
OPK Luxadvor was established by Pugachev as a holding company for several European luxury brands such as Luxe TV, Design Capital and Hediard, a chain of over 300 high-end stores, cafes and restaurants based in Paris. It’s not apparent how Biopure’s medical products would be merged within the existing Luxadvor properties.
Pugachev made his initial fortune in banking, launching International Industrial Bank, or Mezhprombank, in 1992 and building it into the third-largest financial institution in Russia. During his rise, he forged close ties with prominent political leaders in post-Soviet Russia and reportedly issued the first credit cards used by former Russian President Boris Yeltzin and his family.
Forbes magazine estimated that Pugachev’s personal wealth tops $2 billion; he’s one of 12 billionaires with seats in the Russian parliament, serving a district in southern Siberia since 2001. His tenure, however, has not been without controversy — including accusations linking Mezhprombank to a money-laundering scheme dating back to the 1990s with Bank of New York (now part of Pittsburgh-based Mellon Financial Corp.)
The Biopure sale, for a bargain-basement price, is bad news for the company’s stockholders, according to a regulatory filing.
“Biopure does not expect that Biopure stockholders will receive any substantial distributions resulting from these transactions and expects that the bankruptcy proceedings will ultimately result in the cancellation of these equity interests,” the company said in the filing.
Biopure settled a five-year-old shareholders lawsuit last week, in which former company leaders were accused of malfeasance in touting the company’s stock.
Under the terms of the proposed settlement, the company will pay $600,000 to investors contending they were duped by Biopure executives who allegedly concealed negative news about the company’s artificial blood products. Money for the settlement will come from a directors and officers insurance policy covering legal costs associated with management errors and omissions.