ImClone Systems Inc. of New York said it has signed an agreement with E. Merck of Germany for the research, development and commercialization of anti-idiotypic antibodies and recombinant antigens for melanoma therapy.

ImClone will receive more than $10 million from Merck over four years, said Samuel Waksal, ImClone's president. It received an initial payment of "some millions" from Merck when the agreement was signed in December, Waksal said.

Merck received sole marketing rights to the products for Europe, Australia and New Zealand. ImClone is to get licensing fees, research support and royalties on Merck's sales of related products. ImClone retained rights in the United States and will seek a marketing partner for the Far East.

Antibodies are proteins produced by white blood cells that bind to foreign molecules, or antigens. The specific antigen- binding sites on antibodies are called idiotypes. Researchers can create antibodies to antibodies, or anti-idiotype antibodies. These "anti-ids" mimic the original antigen by binding to the same antibody site as the original antigen.

ImClone has developed an anti-id antibody that mimics the GD3 glycolipid found on the surface of melanoma cells, Waksal said. ImClone said it believes that the GD3 glycolipid is the crucial antigen in melanoma. ImClone's antibody fools the immune system into producing an immune response to the cancer.

Tricking the immune system is necessary because it often fails to react to cancer cells, which can grow so slowly that the immune system develops a tolerance to them. Also, the antigen may not be presented to the immune system in a way that enables the immune system to recognize it as foreign. Anti-ids either break this tolerance or bypass the presentation problem, Waksal said.

Phase I clinical trials of Imclone's product against melanoma are set to start July 1 at New York's Memorial Sloan Kettering Cancer Center.

Already under way are Phase III clinical trials of anti-id products developed by Idec Pharmaceuticals Corp. of La Jolla, Calif., against B-cell lymphoma and Phase I clinicals on melanoma, said William Rastetter, Idec's president. No data has been released. -- Karen Bernstein

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