Liposome Technology Inc. said Monday that it has commitments forabout $11 million in units in a private placement scheduled to closeon Thursday.

The units consist of 436,000 shares of a new issue of convertiblereset preferred stock (convertible into 1.47 million common shares)with warrants to purchase a total of 734,000 shares of common stock.Liposome's stock (NASDAQ:LTIZ) closed at $7 per share Monday,up 25 cents.

The reset preferred stock initially is convertible at $7.425 percommon share, a 10 percent premium to Friday's close. Itautomatically will convert into common stock at that price if thecompany's stock closes at more than $13 per share for 20 of 30consecutive trading days before March 25, 1996. If the resetpreferred stock still is outstanding at that time, the conversion pricewill be reset to the lesser of the initial conversion price or the lowestconsecutive 30-day average closing price, subject to a $3.713 floor.

The warrants have a three-year life, and are exercisable at $7.425.

The placement is expected to add about 2.2 million shares toLiposome Technology. The Menlo Park, Calif., company currentlyhas about 19 million shares outstanding. It reported $12.3 million incash and marketable securities on Dec. 31, and a burn rate of nearly$5 million.

In February, an FDA advisory committee voted to recommendapproval of Liposome Technology's DOX-SL as a second-linetreatment for AIDS-related Kaposi's sarcoma (KS) under theagency's accelerated approval program. DOX-SL, the company'slead product, is a liposomal formulation of the anti-cancer drugdoxorubicin hydrochloride. Clinical trials of DOX-SL are ongoing ina number of cancer indications, including late-stage studies as a first-line therapy in KS patients.

Peter Leigh, Liposome Technology's vice president and chieffinancial officer, told BioWorld the $11 million should take companythrough the end of 1995.

"The intent is to provide as early as possible the tangible evidencethat we are building a business," Leigh said. One step to that end, hesaid, is getting U.S. approval; another is a corporate alliance to helpwith commercialization of the product and further its clinicaldevelopment.

Leigh said that a number of potential marketing partners haveapproached Liposome Technology since the advisory committee'srecommendation on Feb. 14. n

-- Jim Shrine

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