Genex Corp. of Gaithersburg, Md., said that it has called on investment banking firms to scout for potential investors or a buyer of the financially strapped company.

Genex (NASDAQ:GNEX) said it examined a range of options before retaining Allen and Co. of New York and TechnoVenture Co. Ltd. of Tokyo to find a firm in Japan.

Genex aims to raise an unspecified amount of funds to develop its two key products, surgical bioadhesives and single-chain antibodies (SCAs).

"Small biotechnology companies are having a hard time (financially) getting products from the laboratory to the marketplace," said Diana Hopkins of Genex. The company would prefer "a large collaboration ... something involving lots of money with a corporate partner," she said. It also accepts the prospect that "a sale of the company or a merger is most likely."

Genex had an operating loss of $4.5 million for the nine months ended Sept. 30 and has taken steps to become a more attractive acquisition. Last November, it laid off 37 employees, or more than half its staff. It also sold its bioseparation device business for $400,000 to Whatman Inc. of Clifton, N.J., and agreed to sell for $2.25 million its technology for making GammaBind protein G for antibody purification to Pharmacia LKB Biotechnology AB of Sweden.

That left Genex with surgical bioadhesives and SCAs.

Its proprietary bioadhesives are biocompatible proteins designed to control bleeding and attach to grafts and wounds. The materials have shown promising results adhering to incisions in rats. They were tested at a medical school in collaboration with unnamed biotechnology companies, Hopkins said.

Genex's genetically engineered SCAs, called SCA antigen- binding proteins, bind to specific cells. They are being developed to deliver anti-cancer drugs to tumors and improve imaging in cancer diagnosis. The National Cancer Institute tested SCAs in animals, and clinical trials are planned.

SCAs do not occur naturally. They consist of a single short polypeptide containing the binding sites usually found in the four polypeptide chains of an antibody.

Creative BioMolecules Inc. of Hopkinton, Mass., which is developing a similar compound, has asked the U.S. Patent and Trademark Office to investigate possible conflicts between its patent application and a patent awarded to Genex.

-- Rachel Nowak BioWorld Staff

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