By Randall Osborne

After almost three years of gathering corporate partners, Corixa Corp. has raised $39 million in an initial public offering (IPO) — an amount that surpasses the company's projections and places it among those riding the wave of a financial surge in the biotechnology sector.

Corixa, of Seattle, sold 3 million shares at $13 each, an increase of 250,000 shares over the original proposed offering of 2.75 million shares.

The company will have 11.2 million shares outstanding after the IPO, from which it expects to net $35.4 million, said Steven Gillis, Corixa's president and CEO.

As of June 30, the company had $15 million in cash.

Underwriters Lehman Brothers and Invemed Associates Inc., both of New York, and Vector Securities International Inc., of Deerfield, Ill., received an overallotment option of 450,000 shares.

In the past month, biotech stock prices have soared, gaining an average of 14 to 15 percent in value. The NASDAQ Biotech Index closed at 343.31 Friday, up 2.03, which continues a sharp upward trend that began in late August. (For more information on the stock rally and money raised by companies read BioWorld Financial Watch, Oct. 6, 1997.)

Corixa, which filed in July for the offering, focuses on T cell vaccines to treat cancer and infectious diseases. The company has identified a protein known as Leishmania elongation Initiation Factor (LeIF), an enhancer of immune response. Combined with certain antigens, LeIF calls forth a stronger antibody response than the antigen would elicit alone.

In March 1997, the company signed a research agreement giving option rights to LeIF to Pasteur Merieux Connaught, which has subsidiaries and divisions in Lyon, France; North York, Ontario; and Stillwater, Pa. In May 1996, Corixa collaborated with Vical Inc., of San Diego, to develop cancer products using the LeIF technology. In November 1996, the company formed a pact with CellPro Inc., of Bothell, Wash., to develop ex vivo cancer therapies.

Corixa was founded in 1994. The company partnered its infectious-disease vaccine program in October 1995 with SmithKline Beecham Biologicals S.A., of Rixensart, Belgium, which is also working with Corixa on cancer vaccines.

In development by Corixa are vaccines for cancers of the breast, ovaries and lung, as well as lymphoma. "We have a couple of things in Phase I clinical trials," Gillis said, identifying them as the Her-2/neu vaccine for breast cancer and the Muc-1 vaccine, which is designed for use against breast, pancreatic and colorectal cancer.

The company's stock (NASDAQ:CRXA) closed Friday at $13.50, unchanged. *