By Debbie Strickland

Six months after the deal was first announced, Techniclone Corp. has won California regulatory approval of its $24.8 million acquisition of Princeton, N.J.-based Peregrine Pharmaceuticals Inc.

The company acquired all of Peregrine's outstanding stock by exchanging 5.1 million shares of Techniclone common stock. With finalization of the transaction, Peregrine becomes a wholly owned subsidiary of the Tustin, Calif.-based Techniclone, but its Princeton office will stay open at least through an 18-month transition period.

Techniclone's stock (NASDAQ:TCLN) closed Thursday at $4.125, down $0.125.

The merger clears the way for preclinical testing of Techniclone's Tumor Necrosis Therapy and Peregrine's Vascular Targeting Agents.

"We are enthusiastic about the potential synergy these two technologies may have when used in tandem, given how successful they have been individually in preclinical trials," said Alan Epstein, professor of pathology at the University of Southern California Medical Center and Techniclone's director of scientific affairs.

Tumor necrosis therapy (TNT) uses monoclonal antibodies to deliver cancer-killing agents inside tumor cells rather than to the surface membrane, which is the target for most other anticancer antibodies.

Vascular targeting agents are also anticancer monoclonal antibodies, but they work by delivering a thrombotic agent to clog blood vessels of cancer tumors, thus killing the cells.

Earlier this week, the company reached what it called an "important milestone" in the development of its lead product, the Oncolym treatment for intermediate and high-grade non-Hodgkin's B-cell lymphoma.

In preparation for a pivotal Phase III trial, Techniclone and partner Alpha Therapeutic Corp., of Los Angeles, completed a 14-patient imaging study using a special measurement technique called quantitative dosimetry, in order to show antibody uptake in lymphoma cells.

"The FDA wanted to understand everything it can about the mechanisms," said Lon Stone, Techniclone's CEO. "No one's treated cancer this far along and this aggressively."

An intravenous therapy, Oncolym (I-31 LYM-1) consists of a mouse monoclonal antibody coupled with a radioactive isotope of iodine. According to the company, LYM-1 guides the toxic isotope to the cancerous tissue, with minimal adverse effect on healthy tissue.

The complexity of imaging study, Stone said, was unprecedented, generating a gigabyte of data on each patient.

"It was a very involved project . . . No one had ever done this before," he said.

Alpha is handling final analysis of the imaging data, expected to be presented to the FDA in July. A subsidiary of Osaka, Japan-based Green Cross Corp., Alpha has marketing rights in North, South and Central America, parts of Europe and most of Asia. *