Shares of blood substitute developers Somatogen Inc. andAlliance Pharmaceutical Corp. rose strongly on Mondayfollowing company announcements of development milestones.

Shares of Boulder, Colo.-based Somatogen (NASDAQ:SMTG)gained $5.75 to $48.50 after the company told attendees atHambrecht & Quist's 10th Annual Life Sciences Conference thata patent for its recombinant hemoglobin will issue on Jan. 8 inthe United Kingdom.

The patent, No. GB2 234 749, covers hemoglobin-based bloodsubstitute products that have been genetically engineered toimprove their ability to deliver oxygen to the tissues. A U.S.patent issued in July.

Charles Scoggin, president and chief executive, said thecompany plans to complete by this summer initial humansafety studies of its rHb1.1 recombinant hemoglobin.

Alliance CEO Duane J. Roth told BioWorld that initial Phase Isafety testing of its red blood cell substitute will begin "soon" involunteers whose surgery is not anticipated to lead totransfusion,

The San Diego company's product, a perfluorocarbon thattransports oxygen, is being developed for patients whosesurgery is anticipated to cause severe bleeding.

The company's stock (NASDAQ:ALLP) was up $5 to $34.

Roth said that Alpha Therapeutics, a subsidiary of Green Crossof Japan, already has U.S. approval to sell a perfluorocarbon-based oxygen carrier as an adjunct to balloon angioplasty.

Other competitors in the blood substitutes market, which someanalysts estimate could grow to $3 billion worldwide, includeDNX Pharmaceuticals Inc., The Upjohn Co. with BioPure Corp.,Baxter Health Care Corp., and Enzon Inc.

Alliance also said it has completed an agreement to acquire alloutstanding shares of privately held BioPulmonics Inc. for up to$3 million.

Alliance's acquisition of the rights owned by Seattle-basedBioPulmonics include technology to deliver drugs into the lungswith perfluorocarbon liquids, which will dovetail into Alliance'sdevelopment of its own LiquiVent product. With it, thecompany hopes to treat the 200,000 patients a year whoexperience respiratory distress syndrome, a condition nowassociated with 50 percent mortality.

Alliance has paid $100,000 to former BioPulmonicsshareholders. They will receive $950,000 by December andadditional sums of $1 million on or before December 1993 andJune 1995, subject to Alliance's right to terminate theagreement prior to making the final payment. Payments will bein cash or shares of common stock, at Alliance's discretion.

-- Karen Bernstein and Roberta Friedman

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