Glaxo Holdings plc and Wellcome plc, both based in London, signed aletter of intent Wednesday giving Wellcome the option to develop andmarket 3TC for the treatment of HIV.The product currently is in Phase II/III clinical development incombination with Retrovir, or AZT (zidovudine), in patients with HIV.Results from the trials are due in the fourth quarter, after whichWellcome will decide whether to exercise its option.Wellcome has marketed AZT, the only FDA-approved treatment forHIV, since 1987. 3TC, a nucleoside analogue, was discovered andpatented by BioChem Pharma Inc. of Laval, Quebec, and licensed toGlaxo in 1990.All three of the companies benefit under the arrangement, according toTim Wilson, a Hambrecht & Quist analyst. "It's excellent foreverybody," Wilson told BioWorld. "If this goes ahead, everybodywins. It was the exact logical thing to do."Glaxo will continue clinical development of 3TC for the treatment ofhepatitis B. The agreements between BioChem and Glaxo do notchange. If Wellcome exercises its option, it would take over thedevelopment and marketing of 3TC (under a different name) for HIVtreatment. Once marketed, Wellcome would make royalty payments toGlaxo based on sales. Glaxo then would make royalty payments onthose sales to BioChem. In addition, Wellcome would make milestonepayments to Glaxo, and milestone payments will be paid to BioChemas 3TC progresses in clinical development."The future use of (3TC) in AIDS, I believe, will be in combinationwith AZT," Wilson said. "There are good scientific reasons why AZTand 3TC should work well in combination. The virus finds it difficultto become resistant to both drugs at the same time."He said Wellcome would benefit by protecting its hold on the AIDStherapy market, and it has every reason to want to commercialize thecombination therapy because of recent trial results that questioned thecontinued effectiveness of AZT.Glaxo, Wilson said, wanted to develop 3TC as a front-linemonotherapy for AIDS. But since the consensus is that combinationtherapy might be more effective, reducing potential revenue, Glaxowill focus principally on its use for hepatitis B.Combination Therapy is PromisingAnd BioChem benefits all the way around. It gets the same royaltystructure with backing of the world's largest marketer of treatments forAIDS, Wilson said.Francesco Bellini, president and chief executive officer of BioChem,said, "I believe in the future of combination therapy to fight HIV. Thenew therapeutic approach being evaluated for 3TC and Retrovir willalso benefit patients, since the new marketing arrangement would helpexpedite delivery of 3TC through Wellcome's highly experiencedmarketing and distribution channel."In conjunction with the letter of intent, Glaxo and BioChem amendedtheir licensing agreement contingent on Wellcome exercising itsoption. The amendment would allow BioChem to get exclusiveCanadian marketing rights to 3TC for HIV.Stock prices closed down Wednesday for both Glaxo (NYSE:GLX)and Wellcome (NYSE:WEL), which Wilson said was a reflection ofbiotechnology market conditions, not the option agreement. Glaxodropped $1 per share, closing at $18.50 in heavy trading. Wellcomefell 13 cents to $9.13 per share, and BioChem (NASDAQ:BCHXF)was up 62 cents per share, closing at $11.50 per share.0324GLAXO

-- Jim Shrine Staff Writer

(c) 1997 American Health Consultants. All rights reserved.