David Blech, chairman of the New York investment bankingfirm that bears his name, has just infused $10 million of much-needed cash into Interferon Sciences Inc., with the first $2million of the investment closing Friday.
Blech (or his designees) will purchase altogether 2.5 millionunits, each of which consists of two shares of common stock(NASDAQ:IFSC), a seven-year warrant to purchase one share ofcommon stock at $3.25 per share and a seven-year warrant topurchase one share of common stock at $5 per share.
The investment, totaling $10 million, will be made over a six-month period. Interferon Sciences issued a note for the first $2million, which will be converted into 500,000 units. NationalPatent Development Corp., which owns 53 percent of theoutstanding stock of Interferon Sciences, agreed to vote itsshares in favor of the transaction.
Prior to the Blech deal, the New Brunswick, N.J., company hadabout $5 million in cash on hand, according to the company'spresident, Samuel Ronel.
"This deal will add an additional $10 million over the next sixmonths, which will put us in a much better position toaccelerate our clinical program, which is critical to our success,"Ronel told BioWorld.
Interferon Sciences' clinical program is focused on developingtherapeutic applications for Alferon N, its FDA-approvednatural interferon derived from human leukocytes. Thecompany currently markets an injectable formulation of theproduct for the intralesional treatment of refractory orrecurring external genital warts. But it's currently got AlferonN in trials for treating a number of other indications, mostnotably AIDS.
In fact, the company is presenting two posters at the upcomingInternational Meeting on AIDS in Berlin next week, Ronel toldBioWorld. They will present clinical trial data on injectableAlferon N in asymptomatic HIV-positive patients (a Phase Istudy done at Walter Reed Army Institute of Research), as wellas a second low-dose Phase I/II oral study done at Mount Sinaion ARC and AIDS patients, Ronel added.
Referring to the second study, Ronel explained thatadministering very low doses of interferon into the mouth is anespecially controversial area of interferon research. "There area lot of skeptics" as to its effectiveness, he said, "but our dataindicate that there seems to be some symptomologicalimprovement in these patients."
Ronel added that The National Institute of Allergy andInfectious Diseases (NIAID) is planning to sponsor and conducta large U.S. trial on oral dosage of interferon in AIDS patients inthe fall, and one of the drugs it will test is Alferon N.
Interferon Sciences also is investigating the uses of Roferon Nin treating human papilloma virus infection, recurrent herpesand hepatitis C, Ronel said.
Last Thursday, Interferon Sciences halted trading on its stock,which still closed up $1 a share, at $4.63. "We don't knowwhether the fact that the stock ran away in the morning hadanything to do with this deal," Ronel said. "The posterpresentations in Berlin could have been another reason."
The stock closed Friday at $4.13 per share, down 50 cents. Thecompany has 14.4 million shares outstanding.
-- Jennifer Van Brunt Senior Editor
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