Immusol Inc. is joining a handful of companies hopeful that moneywill start pouring back into the biotech sector after a summer inwhich their contemporaries struggled to get deals done.

La Jolla, Calif.-based Immusol filed for an initial public offering(IPO) of three million shares expected to come to market between $9and $11 each. The company, founded in March 1992, is developingproducts based on ribozyme gene therapy and ribozyme-mediatedgene functional analysis.

Immusol has one ongoing corporate collaboration, a potential $49million deal signed in May 1995 with Pfizer Inc., of New York, todevelop ribozyme gene therapy for HIV and AIDS. Through June 30,1996, Immusol had received $11.2 million from the deal. (SeeBioWorld Today, March 24, 1995, p. 1, and May 19, 1995, p. 1.)

Ribozymes are naturally occurring RNA molecules that can beengineered to cleave and inactivate other RNA molecules in specific,sequence-dependent fashion. By cleaving a target RNA, ribozymesinhibit the translation of RNA into protein, thus stopping theexpression of a specific gene.

Ribozymes therefore can be designed to selectively inactivate RNAmolecules and their corresponding proteins, the company said in itspreliminary prospectus.

Immusol said it plans to begin Phase I trials of its lead compound,HIVase I, this year. Other programs at Immusol are being developedto prevent coronary restenosis and to treat hepatitis B and hepatitis C.

The company said ribozyme-based therapies can be based onribozyme gene therapy _ involving the insertion of specificsequences leading to the production of ribozymes within a patient'scells _ or synthetic ribozymes administered as drugs. The company,in its gene therapy approach, has used retroviral, adeno-associatedviral (AAV) and adenoviral vectors.

Ribozyme gene therapies, Immusol said, potentially are advantageousto conventional drugs because of the high specificity to inactivatetarget genes whose sequences are known; the applicability across anumber of diseases; the potency due to natural catalytic activity; andthe reduced side effects because of target specificity.

Immusol's HIV development efforts intend to inhibit both early stageHIV replication, like reverse transcriptase inhibitors, and late-stagereplication, like protease inhibitors. The company said it hasdeveloped ribozymes directed against highly conserved regions seenin different strains of HIV and believes its gene therapy approach willtarget several sequences simultaneously, minimizing the possibility ofdrug-resistant mutations.

The company's Phase I trial will be in HIV-infected patients. HIVaseI uses retroviral vectors to deliver two of the company's HIVinhibitory ribozyme genes to cells ex vivo, which then will bereturned to the patient. A second-generation multi-ribozyme productis envisioned using AAV vectors for in vivo delivery of ribozymegenes for relatively long-term expression in non-dividing cells.

Pfizer will conduct and fund all clinical trials and commercializeresulting products. Immusol has co-manufacturing rights and wouldget royalties on sales.

None of Immusol's other programs is partnered.

In coronary restenosis Immusol has engineered ribozyme genes intoviral vectors and synthesized chemically modified ribozymes. Thesynthetic product, in a preclinical study, reduced restenosis in a ratcarotid artery restenosis model. Immusol is optimizing the ribozymesand delivery vehicles with the intention of evaluating the products ina porcine model.

Immusol said it believes hepatitis C virus (HCV) will be particularlyamenable to ribozyme gene therapy since the virus replicates entirelythrough RNA intermediates, which should be susceptible to cleavage.

The company has engineered ribozyme genes directed againstconserved sequences of the HCV genome. Those ribozymes cleavethe appropriate RNA target in vitro and the genes inhibit expressionin tissue culture models. Ribozymes from intracellular delivery arebeing formulated.

The idea in hepatitis B is similar to HCV, and the program is in asimilar stage of development.

On June 30, 1996, Immusol had about $7.7 million in cash andequivalents. After the offering there would be about 13 million sharesoutstanding. That doesn't include two million shares issuable uponexercise of options with an average exercise price of 10 cents each.

The offering is being managed by PaineWebber Inc. and Needham &Co. Inc., both of New York, and Sutro and Co. Inc. of Los Angelesand San Francisco.

After the offering BankAmerica Ventures, of La Jolla, Calif., willown 15.4 percent of Immusol. Pfizer Inc., with a 7 percent stake, isthe only other entity that would hold more than 5 percent of thecompany.

-- Jim Shrine

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