Alliance Pharmaceutical Corp., having negotiated a marketingagreement for its oxygen carrier LiquiVent with German drug makerHoechst AG, is heading into the equity markets to sell 2.5 millionshares in an effort to raise more than $40 million.

LiquiVent, one of San Diego-based Alliance's lead products, is anoxygen carrying liquid administered directly into lungs for treatmentof acute respiratory failure. It is under evaluation in Phase II/III trialsfor children and is in Phase II tests for adults and infants bornprematurely.

In late February 1996, Hoechst subsidiary, Hoechst Marion Roussel,agreed to make a $22 million equity investment, pay license fees, andcontribute milestone and royalty payments for worldwide rights tomarket LiquiVent. Both Hoechst and Hoechst Marion Roussel areheadquartered in Frankfurt, Germany. Alliance officials said the dealcould be worth up to $100 million. (See BioWorld Today, March 1,1996, p. 3.)

Alliance entered a similar agreement in August 1994 with Johnson &Johnson, of New Brunswick, N.J., for Oxygent, an intravascularoxygen carrier in Phase IIb trials for use as a substitute for bloodtransfusions during surgery. Johnson & Johnson made a $15 millionequity investment. Alliance officials said the deal, which also couldyield up to $100 million, included license fees, milestone paymentsand royalties.

Alliance's fiscal year ends June 30. As of Dec. 31, 1995, thecompany had $12.7 million in cash and a $14.7 million net loss forthe last six months of the year. For the fiscal year 1995, the companyreported a net loss of $29.7 million.

Based on an expected offering price of $18.12, the equity financingwould raise $45 million. Alliance's stock (NASDAQ:ALLP) closeddown $2.12 Friday to $16.25.

Alliance said about $2.5 million in proceeds will be used torepurchase a warrant for 500,000 shares held by BoehringerIngelheim GmbH, of Ingelheim, Germany.

Following the offering, Alliance will have more than 27 millionshares outstanding. n

-- Charles Craig

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