Gynex Pharmaceuticals Inc. has reached an agreement inprinciple with investor David Blech under which he will buy $3million of new common stock and warrants, the company saidThursday.

Gynex will issue 666,667 units to Blech. Each unit will consist oftwo shares of stock, two class A warrants and one class Bwarrant.

After the units are issued, Gynex will have 12.8 million sharesof stock outstanding and Blech will hold a 10 percent equityinterest. He will have one board seat.

The class A warrants are exercisable for six years to purchaseone share of stock for $3, and the B warrants are exercisablefor seven years to buy one share at $6. The stock(NASDAQ:GYNX) closed Thursday at $3.63, down 31 cents.

Gynex is developing products for endocrinology, AIDS,gynecology and reproductive medicine. Its lead product,Oxandrin, is in Phase III trials for use in constitutional delay ofgrowth in boys and for treating Turner's syndrome in girls.

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