MicroProbe Corp. has received $2 million from Procter & GambleCorp. to continue a research and development collaborationinvolving MicroProbe's DNA-based diagnostic for detection ofperiodontal disease.The funding from Procter & Gamble, of Cincinnati, plus another$470,000 grant from the National Institutes of Health (NIH), givesthe Bothell, Wash.-based company a much-needed infusion ofcapital as it fights to recover from the financial crisis created by thedownfall of David Blech's biotechnology financing machine lastmonth.MicroProbe's Chief Financial Officer Gregory Sessler toldBioWorld the company is in discussions with several investors formore financing and may complete those talks soon.MicroProbe's CEO Fred Craves, in a prepared statement, said,"While the commitment from Procter & Gamble and the [federal]grant give us additional resources to continue our research anddevelopment activities, we still must obtain additional financing tocontinue operations."Said Sessler, "This commitment by Procter & Gamble is asignificant statement. They are aware of the situation at thecompany and they are willing to step up and make a commitmentwhen we need it."MicroProbe was among the hardest hit of Blech-associatedbiotechnology companies when he suffered a capital crisis and hisNew York investment firm, D. Blech & Co., was forced to ceaseoperations Sept. 22.Blech was an underwriter of MicroProbe's 1993 initial publicoffering and, as a principal investor, had agreed to fund thecompany through June 30, 1995.Following Blech's financial tumble, MicroProbe was told Blechwould not be able to fulfill his financing commitments. Since then,the company has been searching for substitute financing and hassaid it would have to suspend operations if none could be found.Sessler said the funding from Proctor & Gamble and the grant aresufficient to keep MicroProbe's diagnostics program in tact for theshort-term. The additional financing will fund MicroProbe'stherapeutics program."There's been a lot of speculation that the company is going out ofbusiness," Sessler said. "But this is a major step toward dampeningthat speculation and we hope to take the second step soon."MicroProbe's collaboration with Procter & Gamble began in 1993.The agreement involves MicroProbe's Affirm DP microbialidentification test system for periodontal disease. Sessler said thecompanies are nearing completion of clinical trials.The $470,000 from the NIH is a Phase II Small Business InnovationResearch grant over two years. The financing will be directedtoward development of test kits for detection of susceptibility genesfor diabetes, rheumatoid arthritis and other leukocyte antigendiseases.In its therapeutics programs, Sessler said, MicroProbe has threeantiviral compounds in preclinical trials, but will not move toclinical studies until additional financing is secured.MicroProbe's stock was trading on the NASDAQ at $1.38 Sept. 21,the day before Blech's fall. Eight days later it had fallen 89 percentto 16 cents. In addition, the company was forced to stop trading onNASDAQ because it could not meet minimum asset requirements.On Oct. 3, MicroProbe (MPRO) began trading on the OTC BulletinBoard. The stock closed Thursday at 37 cents.D. Blech & Co.'s troubles sent the stocks of other Blech-associatedcompanies into a steep dive. Twelve companies, collectively,dropped an average of 54 percent from Sept. 21 to Sept. 29. Most ofthose companies have stabilized, but only Ariad PharmaceuticalsInc. has climbed near its closing price Sept. 21. (See the chartbelow.) n
-- Charles Craig
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