By Karen Pihl-Carey

San Diego-based Corvas International Inc. has secured $9.75 million in financing and could receive another $5.25 million by year's end.

The financing consists of $6.5 million from the sale of securities to Artisan Equity Ltd., of Bermuda, and $3.25 million from the sale of 1 million shares of Corvas common stock to Sofinov, a financing company based in Montreal, and the sale of 300,000 shares to International Biotechnology Trust, based in London. Artisan also has agreed to purchase another $3.5 million in convertible notes by Dec. 31, as long as Corvas raises an additional $1.75 million.

But that shouldn't be a problem, said Corvas president and CEO Randall Woods.

"We've already had a number of shareholders express interest in participating," he told BioWorld Today. "We've already had various investment parties saying they'd like to put in some money and it's actually more than the $1.75 million. I don't think it would be difficult to bring in the money, but we'd like to see our share price a little bit higher before we do that."

Corvas' stock (Nasdaq:CVAS) closed Friday up 56.25 cents, or 24 percent, at $2.937. The company has about 15.5 million shares outstanding. This financing could result in another 3.3 million shares, Woods said.

The Artisan portion of the financing is a seven-year senior subordinated convertible note with an interest rate of 5.6 percent.

"It's almost like having the use of this money for free until it converts into stock," Woods said.

The notes are convertible into common stock at $3.25 per share, which the company said was a 60 percent premium to the share price at the time of the transaction. Corvas can redeem the notes any time after Aug. 18, 2002. Woods said he hopes the stock value will increase to $15 or even $30, once the time comes to pay it.

Stefan Engelhorn is one of the advisers to Artisan Equity. His family held stock in Bermuda-based Corange International Ltd./Boehringer Mannheim before it was acquired by F. Hoffman-La Roche Ltd., of Basel, Switzerland. He is a Harvard M.D., Woods said.

"Here's a guy who knows the biotech business. He knows the business, the industry. He has thousands of opportunities," Woods said, "where he could invest Artisan's money and yet he chose Corvas as his first investment."

Corvas is designing and developing therapeutic agents for cardiovascular diseases and cancer. Two of its products are in Phase II clinical trials. The company is looking for a partner for its recombinant nematode anticoagulant protein c2 (rNAPc2) that is being tested for the prevention and treatment of clinical disorders resulting from abnormal blood clot formulation or thrombosis. Its other advanced-stage product is recombinant neutrophil inhibitory factor (rNIF), which is in a Phase IIa trial for patients with acute ischemic stroke. That product is partnered with New York-based Pfizer Inc., which has all responsibility for clinical development and commercialization of the product. "So we have no burn at all associated with the NIF compound," Woods said.

Further back in the company's pipeline are cancer compounds that look promising in the area of angiogenesis and metastasis, as well as a compound for malaria, Woods said.

With the $15 million in financing by year's end, Corvas should have in excess of $20 million to carry it through a few years, depending on whether it finds a partner for NAPc2, Woods said.

"What I think is so great about this is this past year is probably the worst ever for biotech in terms of financing," said Woods, who added that Corvas' low valuation, but positive progress in scientific programs made it attractive to investors.