Advanced biotherapy leaving L.A..

The remaining operations of Woodland Hills-based drug developer Advanced Biotherapy Inc. are heading east.

Board member Richard Kiphart, head of the corporate finance department at Chicago-based investment house William Blair & Co., has crafted a $6.5 million deal that will give him personal control of 80 percent of the micro-cap company's shares. Christopher Capps, head of Kiphart's separate private equity firm, has been named chief executive and corporate headquarters will move to Chicago.

The company already was down to a nominal presence in Los Angeles, with office staffed only by former chief executive Edmond Buccellato and his daughter. Most of the action has been at the company's Maryland research laboratory, where researchers are developing antibody-based treatments for certain autoimmune diseases. The approach was pioneered by the company's Russian-born scientific founder, Dr. Simon Skurkovich.

The company's lead drug candidate treats skin diseases and is in early-stage clinical trials in Russia with any commercial launch several years away. In its most recent quarterly report, the company said that as of June 30 it had accumulated debt of $14.2 million and had only $21,447 in cash and investments on hand. Capps said the company expects to be virtually debt free and have approximately $6 million in cash when the transaction closes.

The new financing involves the sale of stock to Kiphart, Capps and other related parties at 1.5 cents per share and conversion of debt to shares at 1.5 cents per share. The company also plans to register a rights offering allowing other existing stockholders t,. purchase 10 shares of common stock at the same 1.5 cent price for every share held.