Vertex Pharmaceuticals Inc. announced Tuesday that it hassigned a $20 million agreement with Kissei Pharmaceutical Co.Ltd. to collaborate on developing orally active drugs fortreating HIV infection and AIDS.

Kissei of Matsumoto City, Japan, will contribute technicalassistance and provide funding over three years to supportVertex's research on drugs designed via rational, structure-based methods to inhibit HIV protease, the enzyme requiredfor the virus' replication.

Vertex's senior scientist, Manuel Navia, and his colleagues havedetermined the precise molecular structure of the HIVprotease, and the researchers are designing syntheticcompounds that bind to the enzyme's active site.

Kissei will develop and commercialize these drugs in Japan andthe People's Republic of China, and will pay Vertex ofCambridge, Mass., a royalty on product sales in those countries.Kissei also has the option to acquire rights to the HIV proteasesin other Far Eastern countries. Vertex has the marketing rightsin North America, Europe and the rest of the world. As well,Vertex will manufacture bulk drug worldwide.

Vertex is currently conducting preclinical studies -- includingscale-up, formulation and toxicology -- on initial compounds,and plans to file an investigational new drug (IND) applicationon one of those by the end of 1993 or early in 1994, accordingto Stephanie Marrus, the company's director of corporatecommunications.

The agreement with Kissei is Vertex's second with a majorJapanese pharmaceutical company. It entered into a five-year,$30 million agreement with Chugai Pharmaceutical Co. Ltd. inOctober 1990 to develop low-toxicity immunosuppressivedrugs for treating organ transplant rejection and suchautoimmune disorders as insulin-dependent diabetes andrheumatoid arthritis. At the time, Chugai also purchased asmall equity interest in Vertex.

As of the end of fiscal 1992, Vertex had approximately 13.2million shares outstanding, fully diluted, and $43.7 million cashon hand, Marrus told BioWorld. The stock (NASDAQ:VRTX)closed Tuesday at $8.13 a share, down 38 cents.

-- Jennifer Van Brunt Senior Editor

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