It seems CytRx Corp. is going back to the well.

The company jumped into the HIV vaccine development fray by licensing a DNA-based product from the University of Massachusetts Medical School, with whom CytRx recently established an RNAi-based relationship. Also, from the outset of the latest arrangement, a $15 million government grant will fuel early clinical work on the HIV vaccine.

While financial terms of the exclusive worldwide licensing agreement were not disclosed, Los Angeles-based CytRx said the $15 million award - from the National Institutes of Health in Bethesda, Md. - is pegged for pushing the vaccine technology into a Phase I program.

"This puts us as basically the world leader in HIV vaccine development now," CytRx CEO Steven Kriegsman told BioWorld Today. "Our partner is U. Mass and if they have world-class technology - particularly technology that's going into the clinic in a few months - we want it."

CytRx last month disclosed its growing relationship with the school through an alliance centered on licensing agreements for the use of RNA interference technology in the development of therapeutic products within the fields of obesity, Type II diabetes and cancer. That deal included 1.6 million CytRx shares for the university, worth about $2.1 million at the time, making the school the company's second largest shareholder. (See BioWorld Today, April 22, 2003.)

"As a result of that, we have developed a very close relationship with them," said Kriegsman, CytRx's largest shareholder. "Because we were in HIV already - our adjuvant TranzFect is being used by Merck in a clinical trial - it was just a natural extension for us."

Whitehouse Station, N.J.-based Merck & Co. Inc. is using the TranzFect technology in a Phase I trial of its own DNA-based HIV vaccine and in three other diseases.

But a bullish Kriegsman said CytRx would beat its competitors into the HIV vaccine market. And investors liked the news - CytRx's stock (NASDAQ:CYTR) jumped 84 cents Wednesday, or 44.5 percent, to close at $2.73.

The lead vaccine candidates are based on a cocktail of human HIV-1 primary isolates from several genetic subtypes of the virus. CytRx called the approach advantageous given its greater chance to maintain efficacy despite the high mutation rate of HIV, a broader immune response against divergent HIV-1 glycoproteins and the possible ability to neutralize a spectrum of HIV-1 viruses.

"U. Mass has taken an approach of using HIV isolated from human isolates," Leonard Ruiz, CytRx's chief scientific advisor, told BioWorld Today. "And that particular HIV virus appears to be more virulent than lab-cultured strains. By using a variety of antigens from those HIV isolates, they expect to generate a higher immune response that will be able to inactivate the HIV."

Shan Lu, an associate professor of medicine at the school, has led the vaccine's development to date. Kensington, Md.-based Advanced BioScience Laboratories Inc. will provide a vaccine booster as development continues.

The license includes a pending patent application. CytRx, which expects the NIH-funded study to begin within the next six months, said positive findings could open the door for additional funding in further clinical trials.

"Our ongoing relationship with U. Mass [reflects] their premier medical research group in the area of RNAi and DNA-based HIV vaccines," Ruiz added.