Hybridon Inc. said Wednesday it raised $26.5 million in a privateplacement of about 3.3 million units priced at $8 apiece, increasing to$81 million the private Worcester, Mass., company has raised sincemid-1991, and $83 million since its founding in 1990.

Also, company officials said a report demonstrating the oralbioavailability of oligonucleotides has been accepted for publicationin an upcoming issue of Biochem Pharmacology. And a third piece ofnews: Hybridon received a milestone payment from Hoffmann-LaRoche Inc. related to a lead compound against hepatitis C.

Hybridon's financing came from institutions and accredited investorsin about one-third portions each from backers in North America,Europe and the Near East. That's been the traditional geographicalmix of the company's financing, with the exception that about 3percent of its financing has come from the Far East, according to E.Andrews Grinstead III, the company's chairman, CEO and president.

Proceeds from the offering primarily will be used to fund trials ofGEM 91, an antisense oligonucleotide in Phase Ib/II testing at 10centers in the U.S. and France. The escalating-dose study involves 84asymptomatic patients and will look at safety issues as well asstandard surrogate markers. It should be completed in June, afterwhich Hybridon would expect to begin a six-month Phase II/III triallater this year, Grinstead told BioWorld.

GEM (gene expression modulation) 91 targets the gag gene in theHIV genome. It prevents gag from encoding a protein vital to HIVreplication. The benefit in AIDS treatment is the ability of anantisense sequence to specifically inhibit the expression of HIV-1viral or messenger RNA.

"If you delete the sequence we've targeted from the virus it rendersthe virus nonpathogenic," Grinstead said. "We've been able to inhibitevery strain of the virus the drug's been exposed to. We've used thedrug against over 40 patient isolates."

Hybridon doesn't have a partner for GEM 91, but has beenapproached occasionally from interested parties, Grinstead said. "Ifwe found the right type of partner and the right type of support, wewould welcome a partner," he said. "On the other hand, we have avery solid global investor base of 330 wealthy individuals andinstitutions that have shown a willingness to continue to support us.

"This is the first gene-regulation approach assault on HIV,"Grinstead said. "It's been important for us to focus on this. Whenwe're able to report results it will be easier for a partner to be able tounderstand the value of a relationship with us."

Each of the 3.3 million units consisted of one share of Series Gconvertible preferred stock and a three-year warrant to purchase one-half share of common stock. Every two warrants allows the holder topurchase one share for $10.

Hybridon was helped in the private placement by Paribas CapitalMarket, of London, and advised by Pillar, a Paris-based consultingfirm. Investors included Medtronic Inc., of Minneapolis; BioCapital,of Toronto; Medical Science Partner II L.P., of Boston; SocieteFinanciere de Rombas Compagne, a member of the UnionAssurances de Paris; MAAF Sante, of Paris; La Mondiale, of Paris;and member companies of the Dallah Al-Baraka Group fromChicago, London and Saudi Arabia.

The milestone payment from Roche, based in Basel, Switzerland,stems from a 1993 agreement in which the companies arecollaborating to develop antisense oligonucleotide compounds forhepatitis B and C viruses and human papilloma virus.

"Less than 24 months ago we were at ground zero," Grinstead said."We [now] have highly active compounds in two of the diseases, andhave taken the additional step of selecting the lead compound forhepatitis C." He said clinical plans in hepatitis C are confidential.Potential oral candidates for hepatitis B and human papilloma viruseswill be going into animals.

"If we know the molecular target and have the genetic structure of itwe can build the ideal compound in a matter of days," Grinstead said."The genetic footprint [base sequence] is the basis of our drug."

Hybridon has animal studies ongoing in eight diseases, activecompounds in 23 diseases, 17 proprietary chemistries and more than80 U.S. patents either issued or applied for, Grinstead said. n

-- Jim Shrine

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