A Canadian blood substitute company said Wednesday that ispreparing to have its common shares publicly traded in Canada,and hopes to net C$33 million (U.S.$26 million).

Hemosol Inc. of Toronto is offering almost 3.2 million commonshares at C$11 (U.S. $8.69) each for gross proceeds of almostC$35 million (U.S.$27.65 million), said Alun Davies, thecompany's president and chief executive officer.

The offering is being underwritten by Gordon Capital Corp.,Midland Walwyn Capital Inc., Wood Gundy Inc. and RBCDominion Securities Inc. The underwriters have the option topurchase up to 318,150 additional common shares to coveroverallotments.

The company previously raised about C$19 million (U.S.$15million) in two placements of warrants that went largely toinstitutional investors last year, Davies said. Hemosol filed apreliminary prospectus at the end of February and filed itsfinal prospectus with the securities commissions in eachCanadian province on April 2. The company expects theoffering to be completed April 16.

Formed as a research project with venture capital financing in1986, Hemosol underwent a change of management in 1991,said Davies, a former president of Cannaught Laboratories.Hemosol is building a production facility in Etobicoke, Ontario,where its research department is working on protein cross-linking technology, using a method licensed from theUniversity of Toronto and another licensed from theDepartment of National Defense in Canada.

The company's first product is an oligomer of humanhemoglobin whose structure can be characterized at amolecular level and designed to enhance oxygen-carryingcapacity, Davies said. Because the linkage can be preciselyaltered, the company has "more than one shot" at creating agood product, he added.

"This is not a sprint, this is a marathon," Davies cautioned,saying that Hemosol hopes that its ability to fully characterizeits product early on will pay off. Hemosol is also scaling upproduction for testing.

The company expects to file an investigational new drugapplication (IND) with the FDA and a preclinical new drugsubmission in Canada in late 1993.

Hemosol will use the net proceeds from the offering to payoperating expenses for 1994, 1995 and early 1996.

-- Nancy Garcia Associate Editor

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