Hollis-Eden Pharmaceuticals Inc. grossed about $15 million after completing a private sale of common stock.

The San Diego-based company sold about 1.3 million shares at $11.42 apiece, representing a 15 percent discount to a 15-day trailing average price of the stock. The shares hit a 52-week high of $17.50 on June 16, but for much of the past year they have traded in a range between $4 and $7. The company's shares first crossed the double-digit threshold at the end of trading on May 28, when the stock closed at $10.35.

"The company has had some increasing visibility with some exciting scientific progress over the last couple of months, and I think that is reflected in the stock price, plus biotech in general has gained over the last quarter," Dan Burgess, Hollis-Eden's chief operating and financial officer, told BioWorld Today. "The [stock] price had been somewhat volatile over the last couple of weeks, so we used the 15-day, volume-weighted average price, which both the company and investor group felt was a fair way of dealing with the volatility."

Hollis-Eden, which is developing products for infectious diseases and immune system disorders, now has between 14 million and 15 million shares outstanding.

Burgess said the company would apply the funding toward accelerating development of all its programs. Its recent efforts have focused mostly on HE2100 (Neumune), its lead immune-regulating hormone being studied with the U.S. military for protection from radiation injury. Preliminary results from a pilot study in nonhuman primates indicated that the administration of HE2100 two, four or 24 hours after radiation exposure resulted in a statistically significant reduction in the occurrence of severe neutropenia compared to control animals.

"We are developing it pursuant to a new FDA rule for countermeasures to weapons of mass destruction, or if it's unethical to do human efficacy studies," Burgess explained. "You can potentially be reviewed for approval on the basis of results in raw and animal models, and safety in humans, so the result is a more rapid development track."

Elsewhere in its pipeline, Hollis-Eden recently received a $1.7 million award to further study its lead compound, HE2000 (Immunitin), in cystic fibrosis. Bethesda, Md.-based Cystic Fibrosis Foundation Therapeutics Inc., the nonprofit drug discovery and development affiliate of the Cystic Fibrosis Foundation, is collaborating with Hollis-Eden on a Phase I/II trial of the compound.

The company also is studying HE2000 in clinical trials in HIV/AIDS and malaria, with preclinical investigations also under way to test the compound in tuberculosis and as a protective agent against biowarfare. Phase II data have shown that HE2000 improves various immune system parameters associated with delaying disease progression and lowering viral load when administered as a monotherapy to treatment-naive HIV patients. Phase II data from a study of a buccal tablet formulation of the drug showed that HE2000 cleared malarial parasites and eliminated fever.

Also in its pipeline is another immune-regulating hormone, HE2200 (Reversionex), being developed to improve vaccine responses in the elderly and for lowering cholesterol.

As part of the offering, Hollis-Eden also issued four-year warrants for the purchase of up to about 200,000 common shares with an exercise price of $15.45 apiece. The investment group primarily included accredited institutional investors.

In its first-quarter financial statement for the period ended March 31, Hollis-Eden said its then-current capital resources would sustain operating expenses and capital requirements at least into the second half of next year. The company, which reported $19.4 million in cash and cash equivalents at that point, recorded a $5.2 million net loss over the three-month period. The cash-reserve figure included $9.2 million the company netted midway through the quarter in a convertible notes offering. (See BioWorld Today, Feb. 27, 2003.)

For the last fiscal year, Hollis-Eden reported a net loss of $17.5 million.

Its stock (NASDAQ:HEPH) fell 95 cents Friday to close at $12.27.