In a move to focus on its drug delivery technology, ClinicalTechnologies Associates Inc. has sold its human clinicaltesting business to a management group of three formerofficers and employees of the company.

CTA on Tuesday said it sold the clinical services business fornotes with a face value of $251,000 and will write off about$675,000 representing assets and non-cash employmentexpenses for its fourth quarter ended July 31.

The Elmsford, N.Y., company also said it has settled alllitigation with its founder and former president, SolomonSteiner, resulting in a $503,200 charge to the company's first-quarter earnings. Steiner was replaced by Dr. Michael Goldbergabout a year ago.

CTA stock (NASDAQ:CTAI) closed on Tuesday at $13.75, down25 cents.

The sale and legal settlement will allow the company toconcentrate on development of a patented system for oraldelivery of therapeutics that are now available only byinjection, said Goldberg, who is also chief executive officer.

CTA has developed a method for applying heat to a solution of20 amino acids to create microspheres made of protein-likepolymers called proteinoids. The microspheres, encapsulatingorally administered therapeutics, pass throughgastrointestinal mucosa into the bloodstream.

The microspheres are pH-sensitive so that they remain closedin acidic environments such as the digestive system, butrelease their contents in a base environment such as thebloodstream.

CTA said it has preclinically tested the system with a varietyof compounds and expects either insulin or heparin to be thefirst drug to reach clinical trails.

CTA has developed a simple method of synthesizing largequantities of the oral delivery product and freeze-drying theproteins. It has licensed the technology to SandozPharmaceuticals, Genetics Institute and Upjohn Corp., and toTredegar Industries to develop non-medicinal applications.

-- Kris Herbst BioWorld Washington Bureau

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