Immune Response Corp. and Creative Biomolecules Inc. have joinedthe ranks of public companies hoping to take advantage of WallStreet's current love affair with biotechnology equity. Both firmsfiled registration statements for follow-on offerings in recent days,bringing the number of companies with such offerings pending toeight. In addition, nine initial public offerings (IPOs) are waiting inthe wings.

The two filings come in the wake of a record-breaking month forbiotechnology financing. In May alone, the market snapped up $955million worth of stock in biotechnology companies, more than hasbeen raised in a single month since BioWorld began tracking publicequity offerings in January of 1991 (see BioWorld Financial Watch,June 10, 1996). The current financing window, which swung wideopen in August 1995, has generated a total of $4.5 billion in IPOsand follow-ons. As a point of reference, the legendary window of1991-92 raised a total of $3.7 billion in public equity offerings.

But the spectacular May totals may represent the storm before thecalm. Historically, the summer months of June and July have beenslow for public equity offerings.

Immune Response (NASDAQ:IMNR) of Carlsbad, Calif., filed tosell 2.5 million shares of stock on June 7. At Monday's closing priceof $12.75 per share, the deal would be worth $31.9 million. Friday'soffering is the company's first foray into the public markets since1991, when it raised about $88 million in two separate follow-ons.The first, completed in May, grossed $30.8 million from the sale of2.8 million shares at $11 per share. In November of the same year,the company sold another 1.3 million shares at $44 per share to raise$57 million. Immune Response went public in May 1990.

As of March 31, 1996, Immune Response had $39 million in cash.The net loss for the first quarter was $5.5 million, or 33 cents pershare. In 1995, the company had a net burn rate of $15 million, afigure which likely will rise in 1996 due to the costs of conductinglate-stage clinical trials. Early last month, Immune Response'spartner, a Thailand-based industrial concern known as TrinityMedical Group, made a $5 million milestone-linked equityinvestment in the company, purchasing 333,000 shares of stock at$15 per share.

Immune Response's lead product is Remune, a therapeutic vaccinedesigned to stimulate the immune system against HIV and therebykeep the virus in check. Last March, the company launched a 3,000-patient Phase III study, the first clinical trial to test the hypothesisthat stimulating an AIDS patient's own immune defense system couldhelp fight the disease (see BioWorld Today, March 18, 1996, p. 1).The trial is expected to take three years to complete.

Remune, an inactivated HIV combined with a mineral oil-basedadjuvant, was first proposed by the late Jonas Salk (inventor of thepolio vaccine) and has been in clinical development since 1987.Immune Response currently has two other products _ both of themT-cell receptor peptide-based compounds _ in Phase II studies, onefor rheumatoid arthritis and one for psoriasis.

Immune Response has 17.1 million shares of stock outstanding. Ifsold in full, the current offering will increase that number to 19.6million. Underwriters for the offering are Hanifen Imhoff Inc., ofDenver, and Cruttenden Roth Inc., of Irvine, Calif.

Creative Biomolecules filed a registration statement with theSecurities and Exchange Commission on Monday to sell 2 millionshares of common stock. Based on Monday's close of $9 per share,Hopkinton, Mass.-based Creative Biomolecules (NASDAQ:CBMI)could raise $18 million from the offering. Hambrecht & Quist LLCand Cowen & Co., both of New York, will serve as underwriters.

Monday's filing represents Creative Biomolecules' first trip back tothe public equity markets since it went public in December 1992 at$7 per share. Since then, it has had to repeatedly scramble for cash.The company completed a variety of private and institutionalofferings in recent years, including a 1993 private investment in aPIPE (private investment in a public entity) financing that raised $16million (2.9 million shares at a discount price of $5.50 per share), a1994 private placement of convertible preferred stock that raised$11.2 million (1.13 million units at $9.94 per unit) and a 1995 self-directed institutional offering that raised $12.7 million (3 millionshares at a discount price of $4.25 per share).

In fiscal 1995, Creative Biomolecules reported a net burn rate of $7.6million (the company had a fiscal year-end of Sept. 30 in 1995, buthas since changed its fiscal year-end to Dec. 31). For the first quarterof 1996, the company had a net loss of $3.4 million, or 12 cents pershare. As of March 31, 1996, cash reserves were $17.5 million andthere were 29 million shares outstanding.

In May, Creative Biomolecules received $12 million from StrykerCorp. of Kalamazoo, Mich., its corporate partner for the developmentof OP-1, a morphogenic protein-based compound to treat bonefractures (see BioWorld Today, May 10, 1996, p. 1). OP-1, a paste-like formulation which is classified as a device by the FDA, is beingtested in a pivotal clinical trial as a treatment for non-union jointfractures. Patient enrollment in that trial was completed in late 1995,but the study requires a nine-month follow-up period. OP-1 also isbeing developed for other indications, including renal disorders,dental therapeutics, central nervous system disorders andosteoporosis. n

-- Lisa Piercey Special to BioWorld Today

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