Anergen Inc. didn't get all the money it wanted out of a secondaryoffering completed Friday but did accomplish certain goals in thefinancing.

Anergen, of Redwood City, Calif., sold 3.5 million shares at $3 eachfor gross proceeds of $10.5 million. The stock (NASDAQ:ANRG)was trading in the mid-$4 range when the company registered in lateJune for the offering, which was initially proposed at four millionshares.

"There's no doubt the market conditions are tough," said JohnVarian, Anergen chief financial officer. "Some companies are gettingofferings done, others are choosing to pull their offerings. But it wasimportant for us to get the offering done for various reasons."

One of those reasons was the establishment of relationships with thebanking firms PaineWebber Inc., of New York, and Vector SecuritiesInternational Inc., of Deerfield, Ill., which underwrote the offering.Anergen's last public financing was a self-managed offering of 7.4million shares at $2 each in April 1995.

"This is an important step for us," Varian said of the relationshipestablished with the banking firms and the addition of "key"institutional investors.

Anergen also needed the money. On June 30, 1996, it had nearly $7.7million in cash and has been losing about $7 million per year. Thecompany now has about 18.6 million shares outstanding.

Anergen is developing compounds that selectively interrupt antigenpresentation or inactivate T cells. The focus is on treatingautoimmune diseases.

When Anergen proposed the offering it also announced its secondcollaboration, a deal worth up to $15 million with N.V. Organon, ofOss, the Netherlands. They are working to apply Anergen's AnergiXtechnology to an Organon peptide believed to be involved in theinitiation and progression of rheumatoid arthritis.

AnergiX is a platform technology that contains a majorhistocompatibility complex-derived protein complexed with a diseasespecific auto-antigenic peptide. The peptide helps the compoundselectively target and inactivate T cells responsible for autoimmunediseases. n

-- Jim Shrine

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

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