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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
LXR Biotechnology Inc.
- -----------------------------------------
(Name of Issuer)
Common Stock
- -----------------------------------------
(Title of Class Securities)
502468101
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(CUSIP Number)
David J. Allen, Esquire, 290 South County Farm Rd., Third
Floor, Wheaton, IL 60187-4526 (630) 588-7200
- -----------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notice and Communications)
January 22, 1998
- -----------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject
of this Schedule 13D, and is filing this schedule because of
Rule 13-1(b) (3) or (4), check the following box / /.
Check the following box if a fee is being paid with the
statement /X/. (A fee is not required only if the reporting
person: (1) has a previous statement on file reporting
beneficial ownership of more than five percent of the class
of securities described in Item 1; and (2) has filed no
amendment subsequent thereto reporting beneficial ownership
of five percent or less of such class.) (See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect
to the subject class of securities, and for any subsequent
amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section
18 of the Securities Exchange Act of 1934 ("Act") or
otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act
(however, see the Notes).
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SCHEDULE 13D
CUSIP NO. 502468101 PAGE 2 OF 5 PAGES
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GRACE BROTHERS, LTD.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)/ /
(b)/ /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC, OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2 (d) OR 2 (e)/ /
6 CITIZENSHIP OR PLACE OR ORGANIZATION
ILLINOIS LIMITED PARTNERSHIP
7 SOLE VOTING POWER
NUMBER OF 5,145,034 SHARES
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 5,145,034 SHARES
WITH 10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
5,145,034 SHARES
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*/ /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
18.6%
14 TYPE OF REPORTING PERSON*
BD, PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE
ATTESTATION.
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Page 3 of 5 Pages
Item 1. Security and Issuer
This statement relates to the common stock, par value $.01
per share (the "Common Stock"), issued by LXR Biotechnology
Inc., a Delaware corporation (the "Company"), whose
principal executive offices are located at 1401 Marina Way
South, Richmond, California 94804.
Item 2. Identity and Background
(a) The statement is filed by Grace Brothers, Ltd., an
Illinois limited partnership ("Grace"). The foregoing
persons are hereafter referred to as the "Filers".
Bradford T. Whitmore ("Whitmore") and Surgeon Corporation
("Spurgeon") are the general partners of Grace.
(b) The business address of Grace and Whitmore is 1560
Sherman Avenue, Suite 900, Evanston, Illinois 60201. The
business address of Spurgeon is 290 South County Farm Road,
Third Floor, Wheaton, Illinois 60187.
(c) The principal business of Grace is to purchase, sell,
invest and trade in securities. Whitmore's principal
occupation is that of being a general partner of Grace. The
principal business of Spurgeon is that of being a general
partner of Grace. The names, business addresses, and present
principal occupation or employment of each director and
executive officer of Spurgeon are set forth in Exhibit A
hereto.
(d) None of the persons referred to in this Item 2 has,
during the last five years, been convicted in a criminal
proceeding (excluding traffic violations or similar
misdemeanors).
(e) None of the persons referred to in this Item 2 has,
during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is
subject to a judgement, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) Grace is an Illinois limited partnership and Spurgeon is
an Illinois corporation. Whitmore is a citizen of the United
States.
Item 3. Source and Amount of Funds
The net investment cost of Common Stock beneficially owned by
Grace is $8,775,066.40.
The Common Stock beneficially owned by Grace was purchased
with working capital and partnership funds.
Item 4. Purpose of Transaction
Grace, as an NASD broker dealer, was reporting its holdings
in the Common Stock pursuant to rule 13d-1(b). However,
pursuant to the terms of the Subscription Agreement, dated as
of December 12, 1997, between Grace and the Company, Grace
has the right to designate a member of the board of directors
of the Company. Grace has exercised that right and
designated one of its employees, Brian D. Brookover, to serve
as
a director of the Company. Consequently, Grace is filing
this Schedule 13D to reflect such change in the composition
of the Company's board of directors. The filing of this
Schedule 13D is not intended to be an assertion or
affirmation of any affiliate relationship between Grace and
Mr. Brookover. Grace also expressly disclaims any ability to
control or direct the voting of any shares of capital stock
of the Company owned by Brookover.
Except as set forth in this Item 4, Grace does not have any
present plans or proposals which would result in any of the
actions enumerated in clauses (a) - (j) of Item 4 of Schedule
13D under the Act.
Item 5. Interest in Securities of the Issuer
(a) Grace presently holds a total of 5,145,034 shares of the
Common Stock, which represent approximately 18.6% of the
Common Stock outstanding.
(b) Grace has the sole power to vote and dispose of the
Common Stock.
(c) The transactions in the Common Stock by the Filers during
the period from November 26, 1997 to January 26, 1998 are set
forth on Schedule A hereto.
(d) No person other than each respective owner referred to
herein of Common Stock is known to have the right to receive,
or the power to direct the receipt of, dividends from or the
proceeds from the sale of such shares of Common Stock.
(e) Not applicable
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
Grace does not have any contracts, arrangements,
understandings or relationships with any other person with
respect to any securities of LXR Biotechnology.
Item 7. Material to Be Filed as Exhibits
None
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Page 5 of 5 Pages
SIGNATURE
Grace Brothers, Ltd., after reasonable inquiry and to the
best of its knowledge and belief certifies that the
information set forth in this statement is true, complete and
correct.
Grace Brothers, Ltd.
By:/s/ Bradford T. Whitmore
------------------------
Bradford T. Whitmore
General Partner
Grace Brothers, Ltd.
Dated: January 28, 1998
SCHEDULE A
TRADE ACTIVITY FOR LXR BIOTECHNOLOGY COMMON STOCK
<TABLE>
<CAPTION>
DATE AMOUNT PRICE/SHARE
<S> <C> <C>
12/12/97 3,428,572 $1.75
12/23/97 571,428 $1.75
12/31/97 363,734 $1.75
</TABLE>
EXHIBIT A
Directors and Executive Officers of Spurgeon Corporation
Robert D. Van Kampen
926 Robbins Road, Ste. 180
Grand Haven, MI 49417
Sole Shareholder Director and President of Spurgeon. General
Partner, Van Kampen Asset Management.
David J. Allen
290 South County Farm Road
Third Floor
Wheaton, IL 60187
Vice President and Secretary of Spurgeon. General Partner
and Counsel of Van Kampen Asset Management.
Jerry A. Trannel
290 South County Farm Road
Third Floor
Wheaton, IL 60187
Vice President and Treasurer of Spurgeon. Controller of
Grace Brothers, Ltd. and Van Kampen Asset Management.
All are United States Citizens
The business address of Van Kampen Asset Management is 290
South County Farm Road, Third Floor, Wheaton, IL 60187. The
principal business of Van Kampen Asset Management is
investment and asset management.
