VaxGen Inc. and Genentech Inc. revised their May 1997 license and supply agreement to give VaxGen greater flexibility in commercializing its AIDS vaccine candidate, AIDSVax.

While Genentech, of South San Francisco, maintains its option to market and sell the vaccine candidate in North America, it relinquished its option to commercialize it in the rest of the world.

The new agreement also reduces South San Francisco-based VaxGen's royalty obligations to Genentech for sales to the World Health Organization or United Nations for underdeveloped countries by up to 50 percent so that the vaccine can be made more widely available there.

Additionally, the agreement formalized Genentech's previous decision to waive its option to manufacture the vaccine candidate. The revisions also facilitate VaxGen's ability to pursue international marketing partnerships.

Genentech also extended the milestone date associated with VaxGen submitting a license application to the FDA.

VaxGen President Donald Francis said if AIDSVax proves effective and is licensed, VaxGen intends to sell directly to selected bulk purchasers and to partner with companies with established sales and marketing forces to reach individual customers, including hospitals and physicians.

Genentech's decision not to manufacture AIDSVax follows VaxGen's announcement earlier this year that it is creating a cGMP manufacturing facility in the South San Francisco area with the capacity to produce at least 10 million doses of AIDSVax. - Karen Young