Xoma Corp. said Tuesday it completed a $16 million financinginvolving the sale of Series F convertible preferred stock.

The Berkeley, Calif., company said the money will give it flexibilityin developing Neuprex as it seeks a partner for the drug, arecombinant bactericidal/permeability increasing (BPI) protein. BPIis a human host-defense protein that kills bacteria, neutralizesbacterial endotoxin and inhibits the growth of new blood vessels,Xoma said.

Xoma is preparing a pivotal Phase III study of Neuprex for severemeningococcemia in pediatric patients. The company was granted aSubpart E designation by the FDA to go directly from a small open-label study to pivotal studies because of the severe nature of thedisease. (See BioWorld Today, Aug. 8, 1996, p. 1.)

Ellen Martin, Xoma's director of corporate communications, saidXoma plans to go ahead with the Phase III meningococcemia studyregardless of whether a partner is secured soon. She said loose endsare being tied up with the FDA and sites are being prepared.

The financing also should allow Xoma to complete a series of PhaseII Neuprex studies ongoing in different indications, and may get thecompany through the pivotal trial, Martin said. Any partnershipswould extend the cash, she said.

Following the Series F deal Xoma has about $46.3 million in cashand nearly 35 million shares outstanding. The Series F stock can beconverted into common shares at a discount of 13 percent from themarket price at the time of conversion. It carries an annual dividendrate of 5 percent.

Xoma now is spending about $2 million per month, which gives thecompany two years of cash at its current spending rate. Its stock(NASDAQ:XOMA) lost 6 cents Tuesday to close at $5.38.

The largest of three Phase II Neuprex studies involves infectiouscomplications from severe accidental blood loss. More than 350patients have been enrolled in the study expected to include 400people. Martin said enrollment may be completed by the end of theyear, which would lead to results in the first half of 1997.

Neuprex also is in a dose-escalating Phase II study for infectiouscomplications following partial hepatectomy and in a pilot study incombination with antibiotics for treatment of intra-abdominalinfections. n

-- Jim Shrine

(c) 1997 American Health Consultants. All rights reserved.