Anergen Inc. is applying its AnergiX technology to an N.V. Organonpeptide to develop a compound for rheumatoid arthritis, thecompanies said Friday.

Also Friday Anergen, of Redwood City, Calif., registered to sell 4million shares in a public offering expected to raise about $20million.

Organon, of Oss, the Netherlands, will pay Anergen up to $15 millionthrough a license fee, milestone payments, research and developmentfunding and costs associated with the initial clinical trial. Organonreceived worldwide marketing rights and would pay Anergenroyalties on sales. Through completion of the initial Phase I trialOrganon gained exclusive rights to AnergiX technology forrheumatoid arthritis, so it could test other peptides.

AnergiX is a platform technology comprised of a majorhistocompatibility complex-derived protein complexed with adisease-specific auto-antigenic peptide. The peptide helps thecompound selectively target and inactivate T cells responsible forautoimmune diseases.

Organon has a peptide it believes is involved in the initiation andprogression of rheumatoid arthritis.

Anergen officials couldn't comment because of the stock sale. But ina prepared statement President and CEO Barry Sherman said he ispleased to secure a second partner for the AnergiX technology.Anergen and Novo Nordisk A/S, of Bagsvaerd, Denmark, in March1996 extended and expanded their collaboration applying AnergiX tomultiple sclerosis, myasthenia gravis and insulin-dependent diabetes.

An Organon official said the company has discovered a humancartilage-derived, arthritogenic protein from which it has identified aproprietary epitope. The companies now will work on formulatingthat peptide into the MHC complex for preclinical testing.

Anergen's 4 million share offering would raise $20 million if theshares (NASDAQ:ANRG) sold at Friday's closing price of $5, whichwas up 38 cents. PaineWebber Inc., of New York, and VectorSecurities International Inc., of Deerfield, Ill., are managing theoffering. Anergen has about 15 million shares outstanding andreported cash of $9.7 million on March 31, 1996. The net loss for thefirst quarter was $1.5 million. n

-- Jim Shrine

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