By Brady Huggett

Advanced Viral Research Corp., almost five months after it announced a $20 million equity line of credit, said the original deal has been replaced with one that tops it by 150 percent.

The revised financing contract states a private investor has committed to purchase up to $50 million worth of Advanced Viral's common stock. The registration statement covering the resale of the shares issuable under this financing contract was declared effective by the SEC, while the previous $20 million line of credit was terminated and the filed statement associated with that financing was withdrawn. (See BioWorld Today, Sept. 28, 2000.)

"This was set up by the same group, but it isn't the same investor," said Alan Gallantar, chief financial officer at Advanced Viral Research. "We tell them when we want to pull the trigger and when we want to sell them shares."

The line of credit was constructed by The May Davis Group, of New York.

"The May Davis analysts department is following us now," he said. "It is our first analyst and that is a very positive thing for us."

Advanced Viral, of Yonkers, N.Y., can, at its discretion, sell shares of its stock at a price per share equal to 95 percent of the market price. It issued to certain designees of The May Davis Group five-year warrants to purchase an aggregate of 5 million shares for $1 per share. Additional five-year warrants to purchase an aggregate of 5 million shares become exercisable by certain designees of The May Davis Group only if and when shares are sold under the equity line. The exercise price for such warrants is the greater of $1 or 110 percent of the bid price of the common stock on the date Advanced Viral elects to draw down on the equity line.

Gallantar said the $30 million difference between September and February was simply an increased level of interest in the company, by both The May Davis Group and the private investor.

The line of credit, whether the original $20 million or the jacked-up $50 million, has always been intended to help move Advanced Viral's Product R toward the clinic. Product R, which may be renamed as it makes its way through the clinic, is a nontoxic peptide nucleic acid immunomodulator that has been found to have therapeutic effects against viral diseases such as AIDS and autoimmune diseases such as rheumatoid arthritis. The drug sits on the cusp of IND filings.

"We plan to sit down with the FDA and discuss all the categories we plan to file multiple INDs in," Gallantar said. "There will be several different INDs, and the categories we are looking at are HPV [human papillomavirus], AIDS, hepatitis C and rheumatoid arthritis."

Advanced Viral has not yet released its fourth-quarter earnings, but Gallantar said it raised approximately $6 million in the quarter and has about 380 million shares outstanding. Its burn rate, he said, fluctuates as the company progresses. But the $50 million is there for the taking over the next 30 months.

Gallantar pointed to Advanced Viral's research agreement with the Weizmann Institute of Science as other important news for the company. The Weizmann Institute, along with its developmental arm YEDA, both located in Rehovot, Israel, will investigate the effects of Product R on immune function, especially on T lymphocytes. The experiments will assess the impact of Product R on T-cell proliferation, migration, adhesion and cytokine secretion and they will also determine Product R's effects on adjuvant arthritis.

The company released the news Thursday. Its stock (OTCBB:ADVR) gained 6.2 cents Thursday and fell 2 cents Friday to close at 38 cents. n