By Randall Osborne

West Coast Editor

The first bid to raise cash in the tight U.S. market by Toronto-based Hemosol Inc., which develops treatments for hemoglobin deficiencies, turned out to be anything but a "vein" attempt, and 7 million shares priced at $8.78 each, for net proceeds of about US$56 million.

Expected to close March 6, the offering leaves the company with 32.27 million shares outstanding, and includes an overallotment option of 1.05 million shares for the underwriters, UBS Warburg LLC, of Stamford, Conn., and Dain Rauscher Wessels, of Minneapolis.

Hemosol officials were traveling and could not be reached for comment.

When the company registered for the offering in January, it said the proceeds will help pay for an ongoing Phase III trial of its lead product, Hemolink, a purified, human-derived hemoglobin replacement product. Hemolink spares the need for red blood cell transfusions from donors, thus reducing the risk of passing along disease, or causing adverse immune reactions, as well as avoiding the possibility of transfusing mismatched blood types. (See BioWorld Today, Jan. 19, 2001.)

In July, a similar trial, in coronary artery bypass grafting surgery, was completed in Canada and the UK. Hemosol used the data from that study earlier this week to submit a marketing authorization application to the United Kingdom Health Authority, the Medicines Control Agency.

Further back in the pipeline, Hemosol is experimenting with isolating gamma delta cells, which are a type of T cell, expanding them outside the body and returning them to the patient as a cancer treatment. A compound, HML-115, could move into Phase II testing when Phase I trials are finished near the end of this year.

Proceeds from the financing also will be applied to a manufacturing facility that is under way, and for general corporate purposes.

Hemosol's stock (NASDAQ:HMSL) closed Thursday at $8.75, down 3 cents.