Nearly 20 years ago a graduate student researching the role ofinterferon in bovine immunology stumbled across a treatment thatresulted in complete regression of the malignant melanoma afflictinghis mother-in-law.

Joseph Cummins, who later founded Amarillo Biosciences Inc., wasstudying cattle respiratory tract diseases at the University of Missouriat a time when current treatments weren't helping his mother-in-law'scancer. In his work Cummins had collected hundreds of samples ofnasal secretions from calves and assayed them for interferon activity.At that time the idea that interferon alpha was species specific wasbeing challenged.

The nasal secretions were not pure enough to inject so they wereswallowed by his mother-in-law on a schedule of treatment for fivedays followed by abstinence for a week.

"Over seven weeks she took all the interferon I had taken three yearsto collect," Cummins said. Four months later all but one tumor hadregressed and the largest and final tumor disappeared a few monthslater. The woman remains free of the cancer. Similar results thenwere seen in a second melanoma patient.

The experience with oral low-dose interferon led Cummins in 1984 tostart Amarillo Cell Culture Co. Inc., and the name was changed toAmarillo Biosciences in May 1996. The company last week raised$10 million in an initial public offering (IPO) of two million shares tosupport its work in developing low-dose natural interferon alpha for avariety of indications.

The company, based in Amarillo, Texas, has 11 issued patents andhas completed about a dozen clinical trials. Amarillo Biosciencesexpects to use proceeds from the offering to further development intwo lead areas in the U.S. _ oral mucositis and Sjogren's syndrome.

Amarillo Biosciences gets its product from Hayashibara BiochemicalLaboratories Inc., of Okayama, Japan, which owns about 25 percentof the Texas company. Hayashibara has funded about $9 million ofresearch at Amarillo Biosciences and loaned the company another $3million, $1 million of which will be paid back with proceeds from theIPO.

Hayashibara manufactures and supplies oral interferon alphaexclusively to Amarillo Biosciences for human applications outsideJapan and animal applications worldwide. Also, Hayashibara issupplying the product to Amarillo in North America for non-oraluses.

Amarillo Biosciences also has a manufacturing supply and licenseagreement with Interferon Sciences Inc., of New Brunswick, N.J.,under which it receives interferon alpha for use in animals. InterferonSciences' natural interferon product, Alferon N Injection, is approvedin the U.S. for treating genital warts and is being evaluated for otherdiseases.

Amarillo Biosciences (NASDAQ:AMAR) now has about 5.1 millionshares outstanding. The company had a net loss in 1995 of $312,000and had lost less than $5 million from its founding through March1996. Whale Securities Co. L.P., of New York, underwrote theoffering and has an option to purchase another 300,000 shares.

Amarillo has investigational new drug applications active for usingoral interferon alpha in AIDS, aphthous stomatitis, fibromyalgia,Sjogren's syndrome, oral mucositis, common cold, chronic fatiguesyndrome and appetite stimulation. Research is ongoing in hepatitisB, hepatitis C and respiratory syncytial virus.

The injectable form of interferon alpha is used to treat a number ofdiseases, but the frequency of injections and resulting side effectshave many companies searching for alternatives. AmarilloBiosciences said it believes the low cost and safety profile of low-dose oral interferon alpha gives it a large market potential if theproduct can be proved effective for conditions currently treated byinjectable interferon or conditions for which there is no adequatetreatment.

Sjogren's syndrome is a chronic autoimmune disorder characterizedby severe dryness of the eyes and mouth. Amarillo Biosciences wantsto use oral interferon to increase saliva in those patients. Thecompany currently is working on designing studies in that indicationand for oral mucositis in cancer patients.

Amarillo Biosciences also is testing oral interferon alpha in cats withherpesvirus-1, dogs with keratoconjunctivitis and cattle with shippingfever or mastitis, as well as other animal conditions. n

-- Jim Shrine

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