Gliatech Inc. completed a $5 million private placement of preferredstock that it said possibly could take it to profitability.

McDonald & Co., of Cleveland, managed the financing. Minimuminvestment in the placement was $100,000. The shares were soldprimarily to those with high net worth, and some institutions, in theMidwest, particularly in Ohio, Michigan and Indiana, said RodDausch, Gliatech's vice president and chief financial officer.

The preferred stock automatically will convert to common stock ifand when Gliatech goes public. The Series F financing brings to $30million the Cleveland company has raised since 1988.

Gliatech is developing adhesion control products to prevent excessivescarring after surgery. Adcon-L (for lumbar) and Adcon-T/N (fortendon and peripheral nerve) products have been approved in theNetherlands and France. Regulatory filings for European Unionapproval were completed in April. U.S. pivotal trials for Adcon-T/Nare under way and pivotal trials for Adcon-L will begin this quarter,Dausch said.

"If everything goes according to the plans we made, this money couldtake us into 1997, when we would ramp up sales in Europe" andreach profitability, Dausch said.

Separately, Gliatech has a discovery and development collaborationwith Janssen Pharmaceutica N/V, a Johnson & Johnson subsidiary inBeerse, Belgium, in the area of Alzheimer's disease. And thecompany has an unpartnered research program in cognitionmodulation. Adcon products for additional indications also are indevelopment. - Jim Shrine