The Rhode Island Port Authority and Economic DevelopmentCorp. has priced $30 million in taxable revenue bonds tofinance the construction of a commercial manufacturing facilityfor Massachusetts-based Alpha-Beta Technology Inc.,(NASDAQ:ABTI), the company announced Friday.

The facility will be located in Smithfield, R.I. The offering,which will close on or about Feb. 17, is being managed byPaineWebber Inc., Fleet Securities and Lazard Freres & Co.

The financing "represents one of the first public bond offeringsfor a biotechnology company," said Spiros Jamas, president andchief executive officer of Worcester-based Alpha-Beta."Biotechnology companies have had to rely primarily on equityfor construction of manufacturing facilities."

And in Massachusetts and the Northeast, "bank financing isunavailable for biotechnology companies," according to RobertGottlieb, a company spokesman.

Rhode Island, on the other hand, is "very actively courtingbiotech companies," Gottlieb told BioWorld. In fact, Gov. BruceSundlun, in announcing the agreement last August, stated thatthe yet-to-be built manufacturing facility will createapproximately 200 new high-skill jobs for the state.

"The Port Authority, in the interest of creating high-tech jobs inthe region, came up with a unique funding mechanism and avery creative solution for us," said Bradon Bohrmann, Alpha-Beta's director of finance. "It covers 80 percent of the cost ofthe facility; we pay the other 20 percent out of equity." Thus,Alpha-Beta will be able to construct its manufacturing facilityfor Betafectin while conserving equity capital for productdevelopment and new product discovery, Jamas added.

The facility is designed to manufacture commercial quantitiesof Betafectin, Bohrmann told BioWorld. "Our existing pilotfacility has the capacity to take us through Phase IIIs."

Betafectin, a carbohydrate-based drug for treating andpreventing infections, is now in Phase II clinical trials. In fact,Jamas reported the interim results of those trials the weekendbefore last at the Second International Congress on BiologicalResponse Modifiers.

Jamas said that Betafectin had shielded 47 percent of post-surgery patients from infection, while 100 percent of placebocontrols contracted minor or major infections.

Also located in Rhode Island is a manufacturing facility thatcame out of the joint venture WelGen formed betweenBurroughs Wellcome Co. of Research Triangle Park, N.C., andGenetics Institute (NASDAQ:GENIZ) of Cambridge, Mass. GI soldits minority interest in the partnership for $24 million inSeptember 1992. And CytoTherapeutics Inc. (NASDAQ:CTII), inits former guise, Cellular Transplants Inc., of Providence, R.I.,received $2.5 million in insured bond financing from the statein 1991 to renovate a building in Lincoln as a pilotmanufacturing plant and to buy equipment.

Alpha-Beta's stock closed Friday at $22.25 a share, off 25 cents.

-- Jennifer Van Brunt Senior Editor

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