LONDON - Cantab Pharmaceuticals plc will receive a compensation payment of #5.75 million (US$8.3 million) under an agreement reached with Glaxo Wellcome plc over the return of the rights to DISC HSV, under development as a vaccine against genital herpes.

At the same time, the collaboration between the two to develop DISC HSV as an immunotherapeutic remains unchanged, and Cantab has secured unrestricted access to any intellectual property and clinical trial results it requires to develop the vaccine.

Jurek Sikorski, Cantab CEO, told BioWorld International, "This is without hesitation a good result. It means a significant increase in the value of our product portfolio. Glaxo Wellcome has no future claim and the product comes back to us with some excellent and encouraging [clinical trial] results."

The agreement was forced on the partners as a result of Glaxo's proposed merger with SmithKline Beecham. The U.S. Federal Trade Commission advised Glaxo to drop the DISC HSV vaccine over concerns that the merged company would have a dominant position in the genital herpes market.

"The agreement comes as the result of anti-competitive concerns, and in no way raises any questions about the viability of the product," said Sikorski.

Glaxo will make the payment upon completion of the merger, expected Sept. 25. The deal does not specify that the money be spent on further development of DISC HSV, but Sikorski said Cantab, based in Cambridge, is now making plans for further development of the vaccine, which has completed Phase I. "Under the agreement, Glaxo was doing everything. We need to restructure our resources, and we will move it forward to pivotal trials."

Cantab will have unrestricted access to any intellectual property, know-how, materials or data owned by Glaxo that Cantab believes necessary for clinical development and filing of the vaccine.

The development of DISC-HSV as a therapeutic recently completed enrolment in a double-blind, placebo-controlled Phase II trial. This program will continue without change under the existing development and license agreement in place between Cantab and Glaxo, and milestone payments, royalties, manufacturing and European marketing rights will also remain the same.

The Phase I trial of DISC HSV as a vaccine was reported in September 1999 and showed a significant immune response in previously uninfected subjects. The magnitude of the immune response was similar to that seen in naturally infected subjects who were able to control their disease and therefore show no symptoms. Cantab said this indicates the potential of DISC HSV as a vaccine.

Cantab also has an agreement with SmithKline Beecham for the development of a treatment for genital warts, and this deal is not affected by the merger.

Cantab is not the first UK biotechnology company to benefit from the Glaxo Wellcome/SmithKline Beecham (SB) merger. In May, SB was obliged to hand over all rights and patents for renzapride to partner Alizyme plc, which is developing it as a treatment for irritable bowel syndrome. The compound is in Phase IIa trials, and SB had rights to license it back from Alizyme on completion of Phase IIa.

Cantab is currently in merger talks with fellow UK vaccines company Peptide Therapeutics. Sikorski said, "Talks with Peptide are continuing, and I have nothing to add to what we previously stated."