By Randall Osborne

Gliatech Inc. priced its public offering of 1.5 million shares at $12 per share, raising $18 million, less than half the amount the company expected when it registered.

Gliatech won FDA approval of its ADCON-L anti-scarring gel for lumbar surgery in May. Earlier the same month, the Cleveland-based company filed for a public offering of 2 million shares. At $18.75 per share, which was the price at the time of registration, the offering would have raised $37.5 million. (See BioWorld Today, May 29, 1998, p. 1.)

ADCON-L is a carbohydrate polymer gel that provides a physical barrier to post-surgical scarring and adhesions involving the spinal cord and nerve roots. Classified as medical device, ADCON-L won an FDA advisory panel's backing last December, and Gliatech received an approvable letter related to the product from the agency in April. (See BioWorld Today, Dec. 15, 1997, p. 1, and April 10, 1998, p. 1.)

The panel had recommended pain-relief claims be removed from ADCON-L's label, but the full agency decided to let Gliatech say the gel "improves patient outcome and reduces activity-related pain as compared to the control group."

Gliatech also is continuing to develop ADCON-P, a similar product in solution rather than gel. ADCON-P, in a pilot human trial, is designed for pelvic and gynecological surgeries.

Gliatech has a collaboration with Janssen Pharmaceutica N.V., of Beerse, Belgium, a subsidiary of Johnson & Johnson, of New Brunswick, N.J.

In the offering, the shares are being sold through a group of underwriters managed by Cowen & Co. and Furman Selz LLC, both of New York, and Vector Securities International Inc., of Deerfield, Ill.

Underwriters were given an option to purchase up to 225,000 shares, which would raise another $2.7 million.

Formed in 1988, Gliatech develops products based on research into the properties of glial cells, which make up a major part of the nervous system.

The company's shares (NASDAQ:GLIA) closed at $12.375, down $0.625. *

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