Allelix Biopharmaceuticals Inc. is raising $C22.4 million ($US16.4million) in a warrants sale expected to close by Feb. 7, 1996.

The Toronto company has commitments for the sale of 1.6 millionspecial warrants at $C14 each. Each warrant will convert into onecommon share upon approval of a prospectus.

Toronto firms Nesbitt Burns Inc. and Deutsche Morgan GrenfellCanada Inc. are underwriting the offering. Allelix will have about12.7 million shares outstanding after the offering. The company'sstock trades on the Toronto and Montreal exchanges under thesymbol AXB.

The company reported $C26 million in cash and equivalents at theend of August 1995, the end of its 1995 fiscal year. Allelix had a netloss of $C12.8 that year.

Jerry Ormiston, manager of investor relations at Allelix, saidproceeds from the offering will be used primarily to increase andbuild new technologies, and to move forward existing clinicalprograms.

The company's lead program is ALX1-11, a recombinant humanparathyroid hormone being developed for osteoporosis. Last AprilAllelix started Phase II trials of the compound in Canada and the U.S.The company expects the protein will help increase bone mass anddensity.

The drug formerly was partnered with Glaxo Canada Inc., but Glaxowithdrew from the deal in 1994 and returned all rights to Allelix. Anew partner is being sought, specifically to develop parathyroidhormone beyond Phase II, Ormiston said.

Another drug, ALX40-4C, is in Phase I/II trials for HIV and forcytomegalovirus. Allelix also has earlier-stage research beingconducted with collaborators.

A year ago Allelix and Hoechst-Roussel Pharmaceuticals Inc., ofSomerset, N.J., entered into a five-year collaboration to discover anddevelop drugs to treat schizophrenia and other central nervous systemdisorders.

A 1995 deal with Eli Lilly Canada Inc. involves four years of fundingfor diseases of the central nervous system. That research alsoencompasses obesity.

An August 1994 research collaboration with Groupe Fournier, ofParis, is for the discovery and development of drugs for osteoporosis.

Finally, Allelix has a joint venture with Nordion International, ofKanata, Ontario, called Resolution Pharmaceuticals Inc. The venturelast fall started a Phase I study of RP128, a radiopharmaceutical forthe in vivo diagnosis of inflammatory disease. n

-- Jim Shrine

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