By Matthew Willett

Unigene Laboratories Inc. entered a two-year, $21 million stock purchase equity financing agreement with Fusion Capital Fund II LLC, of Chicago.

Gruntal & Co. LLC acted as financial adviser for the transaction, which Unigene said will fund general corporate operations.

Fairfield, N.J.-based Unigene focuses on therapeutic peptide hormones and oral delivery techniques for those hormones. Its lead product is injectable calcitonin for treatment of osteoporosis.

Unigene President Warren Levy told BioWorld Today the financing offered a level of comfort for the company.

"The first level of comfort was the fact that when you have a limited number of investors you feel like you know who you're dealing with. We feel very comfortable with the people at Fusion," Levy said. "Looking at their track record and what they've done in the past, and that they're recommended by Gruntal, that combination gives us a great deal of confidence."

He added that the structure of the deal - equity sales stretched over a 24-month period - adds to the comfort level.

"It's a no-discount deal, and the fact that we now have quite a bit of control and the ability to decrease or suspend purchases on a monthly basis, or increase purchases depending on the circumstances, gives us a great deal of comfort in this financing."

Levy said Unigene wouldn't publicly divulge information on use of the proceeds other than to say the funding will be used for general corporate purposes.

"This, in combination with licensing revenue through the Pfizer deal and deals we hope to do in the future, should provide us with the capital to go forward for the next several years," he said.

Unigene's 1997 agreement with New York-based Pfizer Inc. unit Warner-Lambert Co. was reported to be worth $54 million, and included a $3 million up-front equity purchase in Unigene. That deal was for an oral formulation of calcitonin, a naturally occurring hormone for treatment of osteoporosis. (See BioWorld Today, July 3, 1997.)

A Phase I/II trial of the oral osteoporosis therapy is nearing its conclusion, Levy said.

"We have an injectable calcitonin approved in the European Union," Levy said. "We have a nasal calcitonin that's just completed clinicals and we have that product moving forward. We have the oral product in the Pfizer collaboration that's just completed a Phase I/II study and we have a variety of other peptides that we've investigated both in man and with the oral delivery technique. We really haven't said anything publicly except to say that we've demonstrated the feasibility of oral delivery."