By Mary Welch

Cerus Corp. sold 1 million newly issued shares of common stock at $25 each to raise $25 million to fund its four programs in clinical trials.

"We wanted to sell 1 million shares but of course we would have preferred selling them at $29 to $30 a share, which is where they were when we started the process," said Stephen Isaacs, Cerus' president and CEO. "Our stock has held up fairly well but there's been a lot of volatility."

The company now has about 12.7 million shares outstanding, and the financial infusion should take the company through 2001, Isaacs said.

The stock's buyers were "the usual list of institutional investors, but we were pleased that Baxter participated," he said. Prudential Vector Healthcare Group, of New York, assisted in the financing.

Baxter Healthcare Corp., of Deerfield, Ill., is partnered with Cerus in a potential $150 million deal that currently has three programs in the clinic, including two in Phase III. Baxter now owns about 17 percent of Cerus, making it the largest single shareholder of the Concord, Calif., company.

"The funds will be used for corporate purposes as well as research and development," Isaacs said. "We have some programs that are not partnered with Baxter, such as our ACIT study for leukemia taking place at the M.D. Anderson Cancer Center [in Houston]. We're looking to add two more sites to that study and also at two other indications."

ACIT is Cerus' proprietary allogeneic cellular immune therapy system and involves the treatment of certain white blood cells (T-cell lymphocytes). Because of their uncontrolled replication, untreated T-cell lymphocytes usually have harmful immune effects during transplant procedures. However, Cerus believes these treated white blood cells can be controlled, which potentially could improve the outcomes of bone marrow transplantation procedures used to treat leukemia and other conditions.

In preclinical studies the ACIT system demonstrated that transfusion of psoralen-(light-activated) treated T cells facilitated bone marrow engraftment and long-term survival without graft-vs.-host disease.

In July, Baxter and Cerus started enrolling patients in a Phase III trial testing a system that inactivates viruses, bacteria and other pathogens that may be present in platelet concentrates for transfusion. Already under way is a Phase III trial for fresh frozen plasma. Also, a Phase Ib trial is under way with Cerus's proprietary pH-activated anchor-linker-effector compound, S-303, for inactivating pathogens in red blood cells.

The company expects to file for marketing approval in 2001 in platelets and in 2000 for fresh frozen plasma.

Cerus' stock (NASDAQ:CERS) closed Wednesday at $25.50, up 50 cents.