Gliatech Inc. completed an initial public offering (IPO)for $22 million, giving the Cleveland-based companyenough cash to support through 1997 its development ofdevices to prevent post-surgical scarring and drugs totreat nervous system disorders.

Rodney Dausch, Gliatech's chief financial officer, echoedthe observations of other biotechnology companyexecutives, saying investor interest this fall is not asaggressive as it was during the summer.

"Our road show went well," Dausch said. "The responsefrom institutional investors was good, although we couldsee the market climate changing. The window was gettingsmaller for biotech offerings."

The $9.50 price for Gilatech's IPO was slightly under therange of $10 to $12 the company targeted, but all 2.3million shares registered were sold. Gross proceeds were$21.9 million.

Dausch said the $19.8 million in net proceeds from theoffering added to the $5.4 million in cash Gliatechalready possessed gives it enough money to fundoperations at least through 1997. The company has about7.1 million shares outstanding.

Gliatech's stock (NASDAQ:GLIA) closed Thursday at$9.50 unchanged.

Managing the IPO were Montgomery Securities Inc., ofSan Francisco, Vector Securities Inc., of Deerfield, Ill.,and McDonald & Co. Securities Inc., of Cleveland. Theunderwriters have options to purchase 345,000 Gliatechshares to cover overallotments.

Gliatech's most advanced products are its Adcon (shortfor adhesion control) devices for preventing scarring andformation of adhesions following surgery. Adcon-L foruse in lumbar surgery is on the market in Europe. AdconT/N for tendon and peripheral nerve repair surgeries isexpected to get European approval in 1996.

Dausch said Gliatech will begin pivotal trials for bothAdcon products in the U.S. this year. By early 1997, itexpects to submit an application for FDA approval ofAdcon-L.

In addition to the Adcon devices, Gliatech is developingdrugs to treat Alzheimer's disease based on glial cells,which are believed to be involved in the build-up of beta-amyloid and formation of senile plaques associated withthe disorder.

Glial cells make up half of the cells of the central nervoussystem and are thought to help regulate growth,differentiation and function of neurons, which account forthe other half of the nervous system's cells.

Gliatech has collaborations with Janssen PharmaceuticaN/V, of Beerse, Belgium, on Alzheimer's diseaseresearch. Janssen is a subsidiary of Johnson & Johnson,of New Brunswick, N.J. n

-- Charles Craig

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