COMMONWEALTH BIOTECH STOCK RISE A MYSTERY

by Nadja Rogoszynski

Richmond, Va., March 25 (Reuters)- Commonwealth Biotechnologies Inc, an upstart company holding a patent on a drug to be used in open heart surgery, is basking in a 13 percent rise in its stock since last week, although the reasons for the spike are not clear, the company's President said.

That patent announcement for a drug replacement for "protamine" last Thursday preceded a 32 percent jump in the stock, but Commonwealth's President, Robert Harris said he thinks some information about the patent may have leaked as well.

"On Thursday our underwriter called me frantic and asked me how the information had leaked. At this point, we thought only the Board of Directors and the counsel knew about the patent," Harris told Reuters early this week in a telephone interview.

Commonwealth Biotechnologies' (CBI) patented drug is supposed to avoid possible harmful effects of protamine, a popular drug used during and after cardiovascular surgeries reversing blood thinner heparin's effects. This new drug could help prevent protamine related complications like hypotension or even death.

After last Thursday's patent announcement, CBI's stock shot up by 32.24 percent to 10-1/4 from 7-3/4, but was trading a bit lower on Wednesday at 8-25/32.

In response to questions on the stock's recent volatility, a director at CBI said investors will need to understand the full potential protamine replacement could have on the company's bottom line in order to make educated decisions about CBI's stock.

"At this point, investors are lacking the info on the magnitude of this compound. How many dollars can you make of it?" Charlie Mills, Chairman of Anderson & Strudwick, the company's underwriter, and a CBI director, told Reuters.

Mills speculated that the stock's recent fluctuation was due to the fact that most of the company's 1.6 million shares belong to long-term investors who are "mostly unsure whether to buy or sell at this point."

"So only a few transactions will cause the stock to move quickly," Mills said.

CBI's president Harris also stressed that the company's fate is not exclusively dependent on the compound's success.

"This was the first patent but another one is soon being reviewed," Harris said. "I can't disclose the details yet, but the next product is within the same general area as this recent one. We expect patenting within 1998."

Harris also said the recent patent acknowledges the effectiveness of the compound in laboratories and on test animals, but that now a partnership is necessary for funding of testing necessary before the protamine replacement can actually be approved for use in humans. The testing could take three to eight years.

"We are now in the position to have become a widely recognized service provider and have become a potential partner for other major pharmaceutical companies.

Asked when such funding partnerships could be established, Harris said: "If we finish our compound experiments and reach our milestones within '98, I would have to say 'Yes, these partnerships will be completed within this year,'" Harris said.

Harris declined to discuss the pharmaceutical companies that CBI might be targeting.

Protamine is used to reverse the blood thinning effects of heparin, which is used in many acute cardiovascular surgeries, but protamine can cause serious complications and sometimes death in 10-15 percent of all cases.

CBI's 1997 annual revenue was $ 1.761 million.