Immune Response Corp., which postponed a follow-on offering thissummer and reactivated it in the fall, priced the equity financingMonday at $6.50 per share, raising $14.3 million.
Of the 2.2 million shares sold, Bayer AG, of Leverkusen, Germany,purchased more than 600,000 as part of a gene therapy collaborationnegotiated in July with Immune Response, of Carlsbad, Calif.
In the Bayer deal, the German drug maker agreed to buy $4 millionworth of stock in Immune Response's offering, which was proposedin June for 2.5 million shares. The equity financing was boosted to2.9 million shares to accommodate Bayer's investment.
Immune Response postponed the offering in August after its stockprice plummeted 40 percent from $12.75 to $7.50 during an industry-wide slump in biotechnology shares. (See BioWorld Today, Aug. 8,1996, p. 1.)
Immune Response's stock fell despite announcement of the Bayeralliance, which could be worth up to $50 million to the company.
Immune Response officials were back on the road this month meetingwith investors, but lowered the shares offered in settling for $6.50 pershare, which is nearly 50 percent below the stock's trading price inJune.
Immune Response's shares (NASDAQ:IMNR) closed Monday at$6.875, down $0.125.
When the company registered for the equity financing, it expected toraise more than $30 million plus another $4 million from Bayer.
Underwriters Hanifen, Imhoff Inc., of Denver, and Cruttenden RothInc., of Irvine, Calif., have options to buy another 330,000 shares tocover overallotments.
As of June 30, 1996, Immune Response had $37.3 million in cashand reported a net loss of $13.2 million for the first six months of thisyear.
The company's lead product candidate, Remune, is a therapeuticvaccine for HIV and is being evaluated in a Phase III study in theU.S. The three-year clinical trial began in March and 1,000 of theexpected 3,000 participating patients have been treated.
Remune is inactivated HIV combined with a mineral oil-basedadjuvant and is designed to stimulate a patient's own immunedefenses to fight the virus. Through purification, the killed HIV losesglycoprotein (gp) 120, which is an envelope protein that helps thevirus infect cells.
Immune Response researchers said loss of gp120 is a benefit,allowing Remune to stimulate an immune assault independent of thesurface protein, whose quick mutations enable HIV to avoid attack.
Earlier this month, the FDA approved an expanded access programfor Remune, making it available to AIDS patients who are noteligible for the Phase III study. (See BioWorld Today, Oct. 15, 1996,p. 1.)
Immune Response's gene therapy collaboration with Bayer targetshemophilia A, the most common form of the genetic disease, which ischaracterized by deficiency of the Factor VIII gene and results inuncontrolled bleeding. In the alliance, Bayer will use ImmuneResponse's non-viral vector system to deliver a Factor VIII gene toliver cells.
Immune Response has two other drug candidates, peptide-basedcompounds targeting T-cell receptors, in Phase II trials for psoriasisand rheumatoid arthritis. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.