By Frances Bishopp

Interferon Sciences Inc., which develops products containing Natural Alpha Interferon, has raised $11.6 million in a private placement of common stock, primarily to institutional investors.

The restricted (not yet registered) shares were priced at $6 each, which represented a 7 percent discount to the closing price of the common stock on the date of pricing.

Interferon Sciences' stock (NASDAQ:IFSC) closed Tuesday at $7.1875, up $.1875. The company's cash on hand is approximately $17 million.

The shares were placed through Sunrise Securities Corp., of New York.

Interferon, of New Brunswick, N.J., makes a highly purified, naturally derived alpha interferon product that is on the U.S. market for the treatment of certain types of genital warts, said Stanley Schutzbank, president of Interferon.

The product currently also is in Phase III clinical testing for treatment of HIV disease and hepatitis C. Both trials, Schutzbank said, are fully enrolled and the company expects to submit a product license application supplement to the FDA for HIV at the end of the first quarter of 1998.

Interferon's Alferon N Injection is approved for sale in Mexico, Germany, Singapore and Hong Kong.

In addition, the company makes Alferon LDO, a low-dose, oral liquid formulation of Natural Alpha Interferon, and Alferon N Gel, a topical (dermatologic) Natural Alpha Interferon preparation in a hydrophilic gel base, Schutzbank said.

Discovered in 1957, interferons are members of the family of glycoproteins, classified as cytokines, which contribute to the body's natural defenses against foreign substances. They are produced and secreted naturally by human cells in response to viruses and other microbes, tumors and antigens.

Interferons bind to specific receptors on cell surfaces and this binding initiates a series of events, including induction of specific proteins, which produce antiviral, antiproliferative and other actions controlling the immune system.

Natural Alpha Interferon is made from human white blood cells. Interferon's Natural Alpha Interferon consists of a specific blend of proteins containing many different molecular species of alpha interferon. Recombinant interferons contain only a single protein species.

In April 1997, Interferon signed on with the American Red Cross to supply human-source leukocytes (white blood cells) to Interferon for the production of the company's Alferon N Injection product.

In 1996, Interferon completed two offerings, raising an aggregate of $25.1 million. *