By Frances Bishopp

Atlantic Pharmaceuticals Inc. raised gross proceeds of approximately $12.5 million through the private placement of 1.2 million shares of Series A preferred stock. Each share of the preferred stock is convertible into 2.12 shares of Atlantic common stock at a conversion price of $4.72.

The offering, originally intended to raise $7.5 million, was increased to meet investor demand, J.D. Lindjord, president and CEO of Atlantic, of Raleigh, N.C., told BioWorld Today.

"The investment enthusiasm was quite strong," Lindjord said. "I think basically they [the investors] are excited about the things we are doing."

At the end of 12 months, if the actual stock price is below the $4.72 figure, the conversion price will be recalculated, Lindjord said. Paramount Capital Inc., of New York, acted as placement agent for the offering.

Atlantic is engaged in the development of four diverse pharmaceutical and biomedical products and technologies for use in cancer, infection, ophthalmic disorders, pain and inflammation, cardiovascular diseases and dermatological conditions.

The company's strategy, Lindjord said, is different from most biotech firms, in that Atlantic is developing a diverse portfolio of product candidates from a variety of sources.

"If one of them fails," he continued, "there are no adverse consequences for the other three, unlike many small companies which have products based on one fundamental idea."

In the area of biotechnology, Atlantic's majority-owned subsidiary, Gemini Technologies Inc., is developing technology that offers the promise of significantly enhancing the efficacy of standard antisense compounds.

The technology combines antisense compounds with 2-5A, a patented technology that functions as an "activator molecule." 2-5A recruits the activity of an enzyme (R-NASE L), that selectively destroys the mRNA target. This enhancement technology appears capable of increasing antisense action by two to three orders of magnitude, relative to conventional (non-2-5A) antisense compounds.

Antisense Drugs In Early-Stage Development

Atlantic is conducting preclinical studies with the 2-5A antisense technology to develop products for infectious diseases such as respiratory syncytial virus (RSV) and herpes, cancers such as chronic myelogenous leukemia, and endocrinopathic conditions such as male pattern baldness and acne.

In April 1996, Atlantic reported preclinical studies of 2-5A against RSV showed the compound was 130 times more effective than a currently approved product, Virazole (ribavirin), which is sold by ICN Pharmaceuticals Inc., of Costa Mesa, Calif.

"This technology has demonstrated in in vitro experiments that it can increase the efficacy of many antisense oligonucleotides by up to 100- to 1,000-fold," Lindjord said.

Atlantic also is developing a group of drugs, known as sulfated cyclodextrins, which have been shown in preclinical studies to reduce the incidence of renarrowing of blood vessels after vascular procedures by an average of 50 percent. These compounds, CT-1 and CT-2, both chemical molecules, work to reduce blood vessel thickening by binding to and inhibiting growth factor proteins and reducing the accumulation and migration of smooth muscle tissue in the vessel wall.

Atlantic's cataract removal device, Catarex, has been shown in preclinical studies to be faster and less invasive than other procedures. This device may help to alleviate some common post-surgical problems and cause less trauma to the eye, potentially hastening l recovery. Lindjord said Catarex, which he described as a "potential breakthrough," is approximately 18 months from the U.S. market.

The device consists of a special tool, that makes a round hole in the lens of the eye, and a probe that breaks up the lens and sucks it out.

Atlantic also has an analgesic and anti-inflammatory compound, CT-3, a molecule which has been shown, in animal studies, to exert powerful pain-relieving and anti-inflammatory effects atextremely low doses and with few observed adverse reactions. "If this drug's profile holds up in man, it could provide an important alternative to non-steroidals," Lindjord said.

Atlantic has approximately $10.5 million in cash, Lindjord said. Atlantic's stock (NASDAQ:ATLC) closed Monday at $7, up $0.312. *