By Lisa Seachrist

After losing one partner and restructuring an agreement with another, Alliance Pharmaceutical Corp. is looking to raise $20 million for the development of two products in Phase III studies and the filing of a new drug application (NDA) for a third.

The company registered with the Securities and Exchange Commission to offer up to 10 million shares of common stock.

¿We are announcing intentions today just to let people know we are looking to raise money,¿ said Gwen Rosenberg, vice president for corporate communications at the San Diego-based firm. ¿We¿d like to bring the money in as soon as possible.¿

Alliance ended 1998 with about $30 million in cash. But the company, which recently completed a pivotal trial for Imagent, an ultrasound contrast agent, is funding the development of two other products in Phase III clinical trials.

Alliance hopes to file an NDA for Imagent in the third quarter of this year. In the meantime, it will continue to shoulder the burden for Phase III studies for both Oxygent and LiquiVent.

Oxygent is an intravascular oxygen carrier, or ¿blood substitute.¿ Similar to blood in that it carries oxygen to tissues through the bloodstream, Oxygent contains no blood products and doesn¿t perform clotting or immunologic functions.

In May 1997, Johnson & Johnson, of New Brunswick, N.J., returned development rights for Oxygent to Alliance, but did not sever the relationship, retaining the right-of-first-offer for worldwide marketing.

LiquiVent, a liquid ventilation agent that carries 20 times more oxygen than water, is currently being tested in adults on mechanical ventilation with acute lung injury from such bodilly insults as drowning, pneumonia and burns. The company theorizes that LiquiVent works by increasing gas exchange, physically opening up air sacs in the lungs, reducing blood leakage from capillaries in the lungs, and reducing inflammation.

However, in April 1997, a pediatric Phase III study of LiquiVent for acute respiratory distress syndrome was halted so the company could study a control-group anomaly. The study resumed four months later, but Alliance¿s partner, Hoechst Marion Roussel, of Frankfurt, Germany, pulled out of the collaboration. (See BioWorld Today, April 16, 1997, p. 1; August 29, 1997, p. 1; and Dec. 9, 1997, p. 1.)

¿It¿s very stressful to have partnerships restructure or terminate,¿ said Rosenberg. ¿The negative side is that we need additional money. The positive side is your destiny is in your own hands, and for a mid-size biotech to have three products in Phase III development, that¿s very exciting.¿

Rosenberg said funds raised in the public offering not used for Imagent, LiquiVent and Oxygent will pay for preclinical development of the company¿s new PulmoSpheres drug delivery system. PulmoSpheres are dry spheres that can encapsulate drugs such as antibiotics, peptides and proteins, as well as other drugs, so that they can be used with a wide variety of inhalation devices.

The company is looking for corporate partners for the PulmoSpheres technology, Rosenberg said. Alliance is also seeking a new partner for LiquiVent.

The company¿s stock (NASDAQ:ALLP) closed Thursday at $2.50, down $0.125.