Houston Biotechnology Inc. (AMEX: HBI, HBWS) has completed aprivate placement of 1.8 million shares of common stock that netted$2.8 million for the Houston-based company. After this offering, thecompany has 5.6 million shares and 4.5 million warrants outstanding.The PIPE (private investment in a public entity), was sold primarily toinstitutional investors, most of them European, at a 12.5 percentdiscount. The deal was managed by SoundView Financial Group Inc.of Stamford, Conn., said John Bingham, Houston's vice president.The proceeds of the offering will be used to fund clinical testing ofHouston's lead product, the 4197X-RA Immunotoxin for prevention ofsecondary cataract and other research and development activities.Secondary cataract, an ophthalmic disorder, affects about 50 percent ofpatients who undergo primary cataract surgery, the company said. Theproduct would be administered during primary cataract surgery and isdesigned to destroy the residual lens epithelial cells that causesecondary cataract. This would eliminate the need for lasercapsulotomy. The company is already in a phase I/II clinical trial of theproduct and is enrolling patients for a second Phase II study.Santen Pharmaceuticals, of Japan, has paid $2 million for the right tolicense this product for the Japanese market. A third $1 millionpayment will be made when clinical safety data on 20 patients havebeen gathered, making the product eligible for an investigational newdrug application in Japan, Bingham said.The company is also developing other immunoconjugate products forglaucoma filtering surgery, proliferative vitreoretinopathy and spasticdystonia.South San Francisco-based Genentech Inc. is also cloning, expressingand testing Houston's lung-derived neurotrophic factor (LDNF) for usein neurological conditions such as Lou Gehrig's disease. Bingham saidhis company expects a decision from Genentech in August. _ PhilippaMaister
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