Allelix Biopharmaceuticals Inc. has raised gross proceeds ofC$13.5 million (US$10.1 million) from the private placement of1.9 million special warrants. The warrants, priced at $5.24each, are exchangeable for Allelix common shares on a one-for-one basis.

The Toronto company announced Friday that the underwriterof its offering, Nesbitt Thomson, exercised its option topurchase 422,000 of the special warrants. The company willnet about $9.4 million from the offering, Allelix's director offinance, David Matthews, told BioWorld.

The offering was similar to a PIPE (private investment inpublic entity) offering, Matthews explained. The warrants havebeen placed with institutional investors who will exchange thewarrants for stock after a prospectus has been filed withCanadian authorities and the shares become freely tradable, hesaid.

The company currently has 7.9 million shares outstanding,which will increase to 9.8 million with the exercise of thewarrants. The exercise of the warrants will add $10.1 million tothe company's current cash balance of about $15.7 million,giving Allelix approximately $25.8 in cash and equivalents.Matthews said that the company expects to burn about $8.6million during 1994.

Matthews said this is the company's first financing since itsinitial public offering in December 1991, when Allelix raised$21.8 million through the sale of 2.6 million shares at $8.29 pershare. The company announced its warrant transaction on Feb.1.

Allelix (TSE:AXB) is developing anti-viral agents. Its anti-HIVcompound, ALX40-4C, is expected to conclude Phase I Canadianclinical trials next week. ALX1-11, for the treatment ofosteoporosis, will commence Phase I clinical testing in theNetherlands in early March, Matthews said. The company isalso researching anti-inflammatories and therapeutics for thecentral nervous system.

-- Karl A. Thiel Associate Editor

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