Genome Therapeutics Corp. raised $2.1 million through the sale ofstock and warrants to investors led by the San Francisco-basedBiotechnology Value Fund L.P.

Genome Therapeutics' chief financial officer, Fenel Eloi, said fundsfrom the private placement will be used primarily to support theWaltham, Mass.-based company's research into sequencing genomesof major bacterial pathogens and identifying human genes associatedwith prostate cancer, manic depression and schizophrenia.

The investors purchased 850,000 units, which consist of one share ofcommon stock and 1.2 warrants. Each warrant is convertible in fiveyears to one share of common stock at a price that was not disclosed.

The sale of 850,000 shares gives Genome Therapeutics a total ofabout 12.6 million shares outstanding. As of the quarter ending Nov.30, 1994, the company said it had $3.6 million in cash and a quarterlyburn rate of $400,000.

Genome Therapeutics uses multiplex sequencing to identify genes.Last December the company said it completed sequencing of thegenes of helicobacter pylori. (See BioWorld Today, Dec. 12, 1994, p.1.). The bacterium is responsible for peptic ulcers and gastritis andmay be linked to stomach cancer.

Eloi said Genome Therapeutics is in "serious discussions withpharmaceutical companies for the rights" to the genome data basesfor H. pylori and other pathogens .

The company's stock (NASDAQ:GENE) closed Thursday at $3.12,up 6 cents. _ Charles Craig

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