LONDON - Peptide Therapeutics Group plc was awarded an immediate grant of $263,000, potentially followed by $2.7 million over two years, by the U.S. National Institutes of Health to develop a vaccine against the latest public health threat, West Nile virus disease.

The grant is a timely boost for Peptide, which confirmed at the end of last month that it is in bid talks with fellow vaccines company Cantab Pharmaceuticals plc, also based in Cambridge, UK.

Seven people were killed in the first U.S. outbreak of the disease in New York in 1999. A further 55 contracted encephalitis and were hospitalized, while antibody surveys indicated that 2.5 percent of New York metropolitan residents were infected, making it likely many had developed milder illnesses. Fears of another outbreak this year led to the closure of Central Park in New York last month while it was sprayed with insecticide to kill mosquitoes infected with the virus.

Other states affected by the 1999 outbreak were New Jersey, Connecticut and Maryland. Wild birds and a number of horses also were affected. This year infected birds and mosquitoes have been detected in a wide area from New Jersey to Massachusetts. The virus that causes West Nile encephalitis occurs in Europe, Asia and Africa. The virus grows in birds, and is transmitted by mosquitoes from birds to humans and other mammals such as horses and cows.

There is no vaccine or specific therapy against West Nile virus disease. Peptide will use its proprietary ChimeriVax technology to develop a live attenuated vaccine. The technology uses a clone of Yellow Fever 17D, an existing vaccine, as the foundation for construction of new live, attenuated viruses against related flaviviruses. The genes for the viral envelope of Yellow Fever 17D virus are replaced with the corresponding genes for the target virus.

The aim is to create a Yellow Fever-West Nile hybrid containing the West Nile envelope proteins required for stimulating immunity, but retaining the replicative machinery of the benign Yellow Fever 17D vaccine.

ChimeriVax technology is being used in the development of vaccines against dengue fever, Japanese encephalitis, tick-borne encephalitis and hepatitis C. The lead product, against Japanese encephalitis, is due to enter Phase I soon.

The NIH grant has been awarded through Peptide's U.S. subsidiary, OraVax Inc., of Cambridge, Mass. The initial $263,000 will cover the first eight months of development. If successful, the second stage of the grant is worth $2.7 million over two years, which Peptide says will cover all R&D costs including initial clinical trials.

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