OraVax Inc. raised $14.5 million in an equity financing, but with themarket in biotechnology slumping, the Cambridge, Mass., companyhad to settle for $7.25 per share, which was 44 percent below thecompany's stock price three months ago when the public sale wasproposed.

OraVax, whose drug development focuses on stimulating the body'smucosal immune system, registered to sell 2.5 million shares when itsstock was trading at $13.62. At that price the company would havegenerated more than $30 million. (See BioWorld Today, April 4,1996, p. 1.)

OraVax went public in June 1995, selling 2.3 million shares at $10per share for gross proceeds of $23 million.

With the stock price slumping, OraVax reduced the number of sharesin its follow-on public offering to 2 million. It now has 9.6 millionshares outstanding.

Underwriters Cowen & Co. and Donaldson, Lufkin & Jenrette, bothof New York, have options to purchase another 300,000 shares tocover overallotments.

OraVax (NASDAQ:ORVX) closed Wednesday at $7.75, down 75cents.

As of March 31, 1996, OraVax had $22.5 million in cash andreported a net loss of $5.3 million for the first quarter of this year.The company ended 1995 with a loss of $8.2 million.

In stimulating the mucosal immune system, OraVax is attempting tomake use of the body's first line of antibody defense in battlinginvading bacterial and viral infections. Mucosal tissues line thesurface of eyes and respiratory, digestive and genitourinary tracts,which are protected by immunoglobulin A (IgA) antibodies.

The company's most advanced products are a monoclonal IgAantibody, HNK-20, targeting viral pneumonia in children withrespiratory syncytial virus and a urease-based oral vaccine, UreAB,against Helicobacter pylori, which causes chronic gastritis and pepticulcers and may be a major factor in stomach cancer.

HNK-20 is being evaluated in Phase III trials and UreAB is beingtested in Phase II studies.

OraVax has a collaboration with Pasteur-Merieux Serums et VaccinsS.A., of Lyon, France, for drug and vaccine development against H.pylori. Pasteur-Merieux is a subsidiary of Paris-based Rhone-PoulencGroup. n

-- Charles Craig

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

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