Karen BernsteinBioWorld Staff

Cortecs International Ltd., a developer of oral peptide drugdelivery systems, has raised $17.8 million through a privateplacement to institutional investors of 12.6 million shares at$1.41 per share.

More than half of the proceeds will be used to retire $9.5million of debt. The remaining funds will fund drugdevelopment.

Cortecs was formed in 1976 to deliver protein-based drugsthrough the fat-aborption mechanism of the upper smallintestine.

The company's Macromol water-in-oil microemulsion takesadvantage of the body's natural delivery system for long-chainfatty acids. The system allows polypeptides to pass through thestomach intact. They are then transported into the bloodstreamthrough the lymphatical absorption system.

Cortecs is developing oral formulations of porcinesomatotrophin with American Cyanamid Co. and oral alpha-interferon with F. Hoffmann-La Roche Ltd. The oral alpha-interferon is in a therapeutic study in Europe.

The Middlesex, England, company is also testing oralerythropoietin with Ortho Biotech and testing oral calcitoninwith an unnamed partner.

According to Cortecs' prospectus, an unnamed Americanpharmaceutical company claims rights to the Macromol patent,a claim Cortecs disputes. The companies are not in litigation.

Other drug delivery systems in development are EnzacorEnzyme Delivery System, Oncholab Anti-cancer DeliverySystem and Oral Mucosal Delivery Systems.

The first Enzacor product, Detach, is being sold in Australia byCiba-Geigy Australia Ltd. to prevent and treat pre-weaning andpost-weaning diarrhea in piglets caused by E. coli infection.Detach works by inactivating the E. coli receptors in theintestine.

Cortecs began this month a U.S. study in humans to treat E. coliinfection for travelers using the system.

The anti-cancer system delivers chemotherapeutics in low-density lipoprotein particles, seeking to exploit the enhanceduptake of LDL by cancerous cells. Swedish clinical trials ofthree cancer drugs began in January.

The oral mucosal system aims to deliver vaccines againstbacteria and viruses that invade the upper intestinal orrespiratory tracts. Cortecs hopes to stimulate gut-associatedlymphoid tissue to produce mucosal immunity. One product,Broncostat, was sold to Rorer in 1990 and is on the market inAustralia. Other applications are in animal studies.

After the offering, Cortecs has 76.9 million shares outstanding.Paribas Ltd. of London is the lead underwriter. The placementwas in Australian dollars amounting to A$23.4 million.

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