Alpha-Beta Technology announced Friday that it raised $16million in an initial public offering (IPO) of 2 million sharesfiled in September.
Underwriters Alex. Brown & Sons Inc. and Vector SecuritiesInternational Inc. have an option to purchase an additional300,000 shares to cover overallotments.
The Worcester, Mass., company dropped its original IPO filingin March -- at a proposed price of $14 to $16 per share for 2million shares -- due to a bleak biotech market, said SpirosJamas, company president and chief executive officer. Jamassaid the company raised $16 million in a private placement inFebruary and was under no pressure to raise additional capitalthen.
He said the decision by Alpha-Beta to file again in Septemberwas based upon the achievement of major milestones: Its leadproduct, BetaFectin, entered Phase II trials, and the companynegotiated an attractive deal with the state of Rhode Island,which agreed to pay 80 percent of the costs of a manufacturingfor BetaFectin.
"Having made significant progress, we felt it was OK to goahead and complete the IPO," said Jamas.
Prior to the IPO, Alpha-Beta had $11.5 million cash on hand,and with a burn rate of about $1.5 million per quarter, Jamassaid the company's current funds will take it well into PhaseIII testing of BetaFectin, which he predicted will begin towardthe end of 1993.
BetaFectin is a proprietary carbohydrate immunotherapeutictargeted for the prevention and treatment of infection.According to the company's prospectus, BetaFectin is believedto be the first genetically engineered carbohydrate therapeuticto enter clinical trials.
Carbohydrates play critical roles in controlling infection,inflammation and wound healing, and Alpha-Beta's initialproducts are focused on products derived from beta-glucan, acarbohydrate polymer.
In Phase I human clinicals the drug demonstrated dose-dependent increases in the number of infection-fighting whiteblood cells and their killing activity without any significantadverse effects.
Jamas said Phase II trials of BetaFectin for its first twoapplications, prevention and treatment of post-surgicalinfection and burns, should be completed by the end of March1993.
-- Michelle Slade Associate Editor
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