EPIX Medical, Inc.
Ticker:EPIX 71 Rogers Street
Exchange:NASDAQ-National Market Cambridge, MA 02142
Industry:Manufacturing (SIC Code 2835) (617) 499-1400

Offering Information
Type of Shares:Common Shares Filing Date:12/10/96
U.S. Shares:2,000,000 Offer Date:1/30/97
Non-U.S. Shares:0 Filing Range:$9.00 - $11.00
Primary Shares:2,000,000 Offer Price:$7.00
Secondary Shares:0 Gross Spread:$0.49
Offering Amount: $20,000,000 Selling:$0.27
Expenses:$700,000 Reallowance:$0.10
Shares Out After:8,314,747

Primary Underwriting Group
ManagerTierPhone
Hambrecht & Quist IncorporatedLead Manager (415) 439-3626
Wessels, Arnold & HendersonCo-manager (612) 373-6105

Legal Counsel, Auditor and Registrar
Issuer's Law Firm: Palmer & Dodge
Bank's Law Firm: Hale and Dorr

Selected Financial Data

Dollar amounts in U.S. millions except for per share data
9 Month Ending Financials
Full Year
Audited
Income
Latest
Unaudited
Income
Prior
Unaudited
Income
Balance
Sheet
3/31/95 9/30/96 9/30/95 9/30/96
Revenue:$0.41$9.63$0.90Assets:$13.82
Net Income:-$2.78$2.34-$3.48Curr Assets:
EPS:$0.30Liabilities:$1.80
Prior EPS:Curr Liabilities:
Cash Flow/Oper:Equity:$12.02
Cash Flow/Fin:Cash:
Cash Flow/Inv:

Business Description
The company is developing targeted contract agents both to improve the capability and expand the use of magnetic resonance imaging as a diagnostic tool for a variety of diseases. The company's principal product under development, MS-325, is an injectable vascular contrast agent designed for multiple vascular imaging indications, including coronary artery disease and peripheral vascular disease. The company believes that MS-325 will significantly enhance the quality of images and provide physicians with a clinically superior, noninvasive and cost-effective method for diagnosing cardiovascular disease. The company further believes that MS-325 will simplify the diagnostic pathway for a number of diseases and in many cases replace highly invasive and expensive X-ray angiography, which is currently considered the definitive diagnostic exam for assessing cardiovascular disease.

Competition
The healthcare industry is characterized by extensive research efforts and rapid technological change, and there are many companies that are working to develop products similar to the company's. There are currently no FDA-approved targeted vascular contrast agents for use with MRI. However, there are a number of non-specific MRI agents approved for marketing in the United States and certain foreign markets that are likely to compete with the company's products for certain applications. The company is aware of other agents under development that may have application in vascular imaging. There can be no assurance that the company's competitors will not succeed in the future in developing products that are more effective than any that are being developed by the company. The company believes that its ability to compete within the MRI contrast agent market is dependent on a number of factors including the success and timeliness with which its completes FDA trials, the breadth of applications, if any, for which it receives approval, and the effectiveness, cost, safety and ease of use of the company's products in comparison to the products of the company's competitors. The success of the company will also be based on physician acceptance of MRI as a primary imaging modality for certain cardiovascular and other applications.

Business Plan
The company's objective is to become a leader in MRI contrast agents. It will seek to do so by pursuing a strategy based on commercializing MS-325 and developing new applications for its proprietary technology platform. The company's key business objectives are to: (i) Establish the safety and clinical utility of MS-325 for multiple vascular imaging indications, (ii) Achieve market acceptance of MS-325, (iii) Broaden the use of MS-325 to additional clinical indications, (iv) Develop new targeted MRI contrast agents and (v) Maximize the value of strategic alliances.

Use of Proceeds
The proceeds from the proposed offering will be used to fund research and development, clinical trials, working capital requirements and other general corporate purposes.

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