National Editor

With a handful of products in the early stage works, Hybridon Inc. entered into definitive agreements with institutional and other investors to sell about 16.9 million shares of stock and warrants for about $11.8 million, leaving the company with net proceeds of about $10.8 million.

The warrants' exercise price is $1.14 per share, valid any time on or after Oct. 21, 2004, and on or before April 20, 2009.

Hybridon's stock (NYSE:HBY) dipped 26.3 percent Friday, closing at 70 cents, down 25 cents. A spokesman for the company said he could not comment until after the deal is completed, which is expected to happen Tuesday. The money will be used for research, working capital and general corporate purposes, the company said.

Against cancer, Hybridon is developing IMOxine (HYB2055), a second-generation immunomodulatory oligonucleotide, and GEM231, a second-generation antisense compound that works by inhibiting protein kinase A.

The company said about two weeks ago that a Phase I trial showed IMOxine - which will target refractory solid tumors - was safe and biologically active in healthy volunteer subjects, and a Phase II trial was planned for later this year. A safety study with GEM231 was the subject of an article in Clinical Cancer Research in September, and the drug now is in a Phase I/II trial as a combination therapy with irinotecan (Camptosar, from Pharmacia Corp., since merged with Pfizer Inc.) against solid tumors.

In preclinical study as a vaccine candidate is Amplivax, which consists of HYB2055 as an adjuvant in combination with the immune-based HIV therapeutic vaccine Remune, from The Immune Response Corp., of Carlsbad, Calif., which is collaborating on the product. Also for HIV but in Phase I trials is GEM92, the second-generation antisense drug candidate targeted to a specific region of HIV-1.

For human papillomavirus, MBI1121, a second-generation antisense drug, is in Phase I trials with collaborator Micrologix Biotech Inc., of Vancouver, British Columbia. Several other preclinical candidates against cancer are in the pipeline. One of them, GEM640 (AEG35156), is a second-generation antisense drug targeted to the XIAP gene, which has been implicated in the resistance of cancer cells to chemotherapy. The compound is being developed in a deal with Montreal-based Aegera Therapeutics Inc.

Cash, cash equivalents and short-term investments for Hybridon at the end of last year totaled about $13.7 million, and the company recorded a net loss for the year of about $17.2 million.

Acting as placement agents in the offering, which is made pursuant to a shelf registration, are Thomas Weisel Partners LLC and Merriman Curhan Ford & Co., both of San Francisco, along with Rodman & Renshaw, of New York.