Interferon Sciences Inc., desperate for cash, went to thecapital markets with a follow-on offering of 12 millionshares, sold about 90 percent of them and came awayThursday with $12.8 million, which is enough money forthe next year.Stanley Schutzbank, executive vice president of NewBrunswick, N.J.-based Interferon Sciences, said the hugepublic offering, which boosts the company's outstandingshares to about 33.2 million, was necessary to keepoperating."We wanted to make sure we had sufficient workingcapital to advance our programs," Schutzbank said. "Wewanted to wait for a higher stock price, but we were indire need of cash."The company, formed in 1980, also reported in itsprospectus for the offering that as of March 31 itsaccumulated deficit totaled about $64.6 million.Interferon Sciences sold 10.7 million shares at $1.20 pershare for gross proceeds of $12.85 million. Net proceedstotaled about $12 million. The offering will remain activeuntil Sept. 13 to sell the remaining 1.3 million sharesfrom the 12 million shares registered. Sunrise SecuritiesCorp., of New York, acted as underwriters.Interferon Sciences' stock (IFSC) is quoted on theNASDAQ SmallCap Market and closed Thursday at$2.06, down 6 cents.The company, whose natural alpha interferon is approvedin the U.S. for genital warts, is conducting clinical trialsto expand marketing of the drug to other indications, suchas treatment of hepatitis C, HIV and cancer. Anotherclinical study is planned for multiple sclerosis, but willhave to wait until the company finds a corporate partner.The drug, Alferon N, was approved by the FDA in 1989for genital warts, but Schutzbank said the market is small.The product also was cleared in Mexico where it will besold under the name Altemol. Japan-based FujimotoDiagnostics Inc. has licensed injectable and gel forms ofAlferon for development in that country. InterferonSciences also is developing an oral version of the drug.Most alpha interferon drugs sold worldwide arerecombinant proteins. Interferon Sciences manufacturesits purified natural product from human white blood cells.Schutzbank said Interferon Sciences' studies haveindicated natural alpha interferon may have efficacy andsafety advantages over genetically engineered versions.The Interferon Sciences offering marked the first return tothe capital markets by the company since the collapse inSeptember 1994 of the New York investment firm D.Blech & Co., whose principal, David Blech, was asubstantial shareholder.Blech & Co. was underwriting a follow-on offering forInterferon Sciences when it was forced to shut down.Interferon Sciences and many other Blech-associatedcompanies saw their stocks plummet during the crisis.Schutzbank said Interferon Sciences' share price droppedbecause the company was out of cash and was countingon the aborted offering to raise at least $10 million. n

-- Charles Craig

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