Isis Pharmaceuticals Inc. on Monday said it signed a three-yearcooperative research agreement with two Japanese companiesaimed at developing antisense nucleotides for treating hepatitisC virus.

Under the agreement with the non-profit Chem-Sero-Therapeutic Research Institute (Kaketsuken) of Kumamoto,Japan, and Mochida Pharmaceutical Co. Ltd. of Tokyo, Isis is toreceive an option fee, research funding and milestonepayments amounting to between $5 million to $10 milliondollars, according to a company official.

Isis retains worldwide rights, except for Japan, to any productsresulting from the research. No details of the agreement weredisclosed.

Stock in Isis (NASDAQ:ISIP) of Carlsbad, Calif., closedunchanged Monday at $7.75.

The research institute, considered the largest in Japanspecializing in microbiology and immunology, introduced therecombinant hepatitis B vaccine to Japan.

"They've got quite a lot of knowledge about hepatitis andviruses in general," said B. Lynne Parshall, Isis' vice president.Mochida brings development and marketing muscle to theproject. Isis has an unrelated collaborative agreement withJapan's Eisai Co. Ltd.

Visiting scientists from both the institute and Mochida areexpected to join Isis' staff.

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