La Jolla Pharmaceutical Co. fell victim to recent bearish conditionson Wall Street for biotechnology with a public offering that raised$10 million, which was about half of the total the company hoped togenerate to support its research programs.

When the San Diego company registered in early June 1996 to sellthree million shares, its stock (NASDAQ:LJPC) was trading at $6.75.The offering, however, was priced at $5 per share, which is where thestock closed Monday. La Jolla Pharmaceutical also reduced thenumber of shares sold by one million. The company, which has 16million shares outstanding, ended Tuesday up 50 cents to $5.50.

Underwriters for the equity financing were Robertson, Stephens &Co. LLC, Pacific Growth Equities Inc. and Van Kasper & Co., all ofSan Francisco, and Vector Securities International Inc., of Deerfield,Ill.

La Jolla Pharmaceutical plans to use proceeds from the offering tosupport continued development of its lead product, LJP 394, forlupus and accelerate other programs.

As of March 31, 1996, the company had more than $20 million incash and reported a net loss of $3 million for the first three months ofthis year. With the additional $10 million, La Jolla Pharmaceuticalwill have sufficient funds for more than 18 months of operation.

A Phase IIB efficacy trial of LJP 394 is expected to get under way inthe second half of 1996. The drug is derived from the company'sTolerance Technology, which is designed to make molecules thatbind to the surface of B cells and shut down production of disease-causing antibodies.

LJP 394 targets B cells that produce antibodies to double-strandedDNA. Those antibodies are believed to be responsible for kidneydamage, which is the main killer of lupus patients.

La Jolla Pharmaceutical also has compounds that target antibody-mediated stroke and other diseases, such as deep vein thrombosis andrecurrent fetal loss.

The company's registration for a public offering followed itstermination of a potential $40 million collaboration with LeoPharmaceutical Products Ltd., of Ballerup, Denmark, fordevelopment of LJP 394. The alliance ended on a dispute over Leo'sdecision to proceed more slowly with development of the drug thanLa Jolla Pharmaceutical expected. n

-- Charles Craig

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