By Randall Osborne

DepoTech Corp., which earlier this year filed a new drug application with the FDA for its anticancer drug DepoCyt, has announced a private placement of 1 million shares of common stock at $14.625 per share with Ross Financial Corp., a Cayman Island investment company.

After the sale, DepoTech, of San Diego, will have 14.2 million shares outstanding. The funds will pay for commercialization of DepoCyt and for ongoing programs.

DepoCyt is a sustained-release form of the chemotherapeutic agent cytarabine. It is delivered by DepoTech's lipid-based encapsulation system, DepoFoam, and injected every two weeks.

DepoCyt is used to treat neoplastic meningitis associated with solid tumors. Usually fatal, neoplastic meningitis occurs when cancer metastasizes to tissues around the brain and spinal cord. DepoCyt was developed in collaboration with Chiron Corp., of Emeryville, Calif.

In June, DepoTech bought back from Chiron the Canadian and European marketing rights. Pharmacia & Upjohn Inc., of Kalamazoo, Mich., agreed to pay $19 million in up-front cash and milestone payments for rights to market DepoCyt outside the U.S.

Other DepoTech products are DepoAmikacin, a broad-spectrum aminoglycoside antibiotic, and DepoMorphine, morphine sulfate administered by a single epidural injection for post-operative pain management. Both products are encapsulated by the foam system, and both are in Phase I clinical trials.

A third product is DepoIGF-1, for rheumatologic disease. The formulation, being evaluated as part of DepoTech's agreement with Chiron, is in preclinical development.

Analysts are optimistic about the FDA's approval of DepoCyt. (See BioWorld Today, May 1, 1997, p.1.) Vector Securities International, Inc., of Deerfield, Ill., estimates DepoCyt will produce $33 million in revenues next year, and worldwide sales will reach $138.7 million by 2001.

DepoTech stock (NASDAQ:DEPO) closed Friday at $14.625, up $0.50. The 8-year-old company reported $25.339 million in cash and short-term investments on June 30 and a net loss of $10.726 million for the first six months of 1997. *