BioChem Pharma Inc. sold 1.5 million special warrants convertibleinto 1.5 million shares of stock upon filing of the final prospectus.

The company's president and CEO, Francesco Bellini, told BioWorldthe surprise offer came in at 4:30 p.m. Friday and BioChem Pharmadecided to accept it Monday morning, even though it didn't need themoney.

The warrants were sold for Canadian $20 (about $14.26 U.S.) apiece,for gross proceeds of Canadian $30 million. The price was about theaverage trading price for three days last week, Bellini said. Toronto-based First Marathon Securities Ltd. underwrote the privateplacement.

BioChem Pharma's stock trades on the Montreal and Torontoexchanges (BCH) and on NASDAQ (BCHXF), where it closed at$14.50 Monday, down 31 cents.

The money from the warrants placement already is in the bank, inescrow, pending completion of the prospectus and regulatoryapproval, which should happen in a few months, Bellini said.Conversion of the warrants would give the Laval, Quebec, companyabout 48.8 million shares outstanding and about Canadian $60million ($42.7 million U.S.).

BioChem's lead product, 3TC, is being developed with London-based Glaxo Holdings plc. Glaxo is expected to file in the first half ofthe year for approval of 3TC, a nucleoside analogue that's showngood results against HIV when combined with AZT, an approvedAIDS drug owned by Burroughs Wellcome Co. Glaxo is trying topurchase Wellcome plc for about $15 billion. The closing date ofGlaxo's bid is Wednesday.

"We expect filing in the first half of this year, I think between Mayand June," Bellini said. "We expect approval sometime by the end ofthe year."

BioChem Pharma, which anticipates reporting sales of more than$100 million in 1994, would get double-digit royalties and an overallreturn on 3TC sales of 13 to 15 percent, Bellini said.

Filing will be for approval of the combination of 3TC and AZT, bothreverse transcriptase inhibitors, as a first-line therapy in HIV patientswith CD4 counts of 500 and below, Bellini said.

What's expected to be a larger seller is lamivudine, a differentformulation of 3TC, for the treatment of hepatitis B, Bellini said.Various Phase II and III trials of the drug in that indication areongoing around the world.

Lamivudine also is being developed with Glaxo. One analyst called ita "billion dollar chemical." The prospects leave the drug's inventorin an enviable position.

"We have a lot of brokers asking us if we want to raise money,"Bellini said. "We said we might be interested once we're at a certainprice. There is a lot of demand for our shares."

Bellini said the offer was for many more than 1.5 million shares, butBioChem Pharma decided to dilute shares as little as possible.

"Given the market conditions, to raise money like this is not easy," hesaid. "We were caught by surprise. If you have a late-stagetechnology, they're coming after you.

"This money will let us be much more free to do things we could notdo before," Bellini said. "There's a lot of technology out there. Ourrevenue is growing this year from [Canadian] $100 million to $180million. You have to finance that growth."

"For now," Bellini said, "we are finished raising money. At this[stock] price we are not interested in any more money." n

-- Jim Shrine

(c) 1997 American Health Consultants. All rights reserved.

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