By Randall Osborne

SAN FRANCISCO - Antigenics LLC raised $28 million in a private equity placement for its heat-shock-protein-based vaccines, designed to attack individual patients' tumors.

"It's a customized vaccine, not because we're hung up on customizing, but because cancers have unique antigenic profiles," said Garo Armen, chairman and CEO of New York-based Antigenics. The company was expected to disclose the financing today, as the 17^th annual Hambrecht & Quist Healthcare Conference begins. Armen will be presenting at the conference Thursday.

Heat-shock proteins (HSPs) are a family of highly conserved proteins in the cells of all organisms. The cells' expression increases with physiological stress, such as rise in temperature, that can disrupt the dimensions, or folding, of a cell's proteins, leading to death of the cell. HSPs bind to the damaged proteins, helping them regain their normal shapes. In mice, HSPs have been found to render immunity to cancer.

Antigenics' platform is based on 18 years of research by the company's scientific founder, Pramod Srivastava, director of the Center for Immunotherapy of Cancer and Infectious Diseases at the University of Connecticut School of Medicine, in Farmington.

"Someone once described this as an incredible piece of scientific detective work," Armen said. "He took a principle that had been known for 25 years, and tried to investigate why it worked." Since the research first was detailed in the journal Science three years ago, it has been extensively published, he added. (See BioWorld Today, Oct. 3, 1997, p. 1.)

The company's HSP technology uses the patient's own immune capability to manufacture a drug.

"We pull out the signals from the patient's own tissue," Armen told BioWorld Today. "We have a purified protein that is bound, literally stuck to those molecular signals, and we inject it."

In tumor cells, HSPs associate with peptides specific to that tumor. HSPs are believed to help "offer" the peptides to the immune system for elimination.

"The immune system [otherwise] doesn't see them, because the cancer cell hides them," Armen said.

Antigenics also is researching infectious diseases and autoimmune disorders.

"We're halfway through the preclinical program in infectious diseases," Armen said. "We'll enter the clinic sometime next year." The approach to infectious diseases is somewhat different, he added.

"We take a cell line, infect it with a given virus, and make the product from that cell line," he said.

The autoimmune-disease program is expected to enter the preclinical stage this year, Armen said, adding the company had about $25 million in cash before the most recent financing, with a burn rate of about $10 million per year.

Lead investors included Deutsche Bank AG, of London; Elan Corp., of Dublin, Ireland; Sigma-Tau, of Rome, Italy; Oracle Strategic Partners, of New York; Zeneca Group plc, of London; and SAC Capital, of New York. Sigma-Tau previously had been granted rights to develop Antigenics' cancer products in Italy.

The vote of confidence by investors in Antigenics' unusual approach is an example of the backing sought by many companies presenting at the H&Q conference, which lists more than 280 firms taking part this year and more than 3,400 registrants, said Carol Newman, spokeswoman for H&Q.

"Last year was record-breaking," Newman said. "This year matches, if not exceeds, last year's numbers."

The registration rolls show that, although the biotechnology industry "was not all that hot" during the past year financially, interest by investors has heightened, Newman said.

"Usually, some news breaks at the conference, so there's a lot of anticipation," she said. n