SYDNEY, Australia - A consortium of Australian companies and universities has won US$16 million (A$27 million) from the U.S. National Institutes of Health to fast-track development of a vaccine to prevent AIDS.

The consortium, which includes the University of New South Wales in Melbourne and two listed companies - Virax Holdings Ltd. and Institute of Drug Technology Australia Ltd., both based in Melbourne - was one of four groups to be awarded a total of US$70 million over the next five years to produce preventive HIV vaccines. All four groups are working on vaccine candidates.

The Australian group was the only non-U.S. consortium to be awarded an HIV Vaccine Design and Development Team (HVDDT) contract, with the contracts being one response to an earlier call by U.S. President Clinton to develop vaccines against globally important diseases such as AIDS, tuberculosis and malaria by 2007.

One immediate result of the announcement was a surge in the share price of the Australian companies. The share price of Virax, which owns the technology to be used in vaccine, increased by 50 percent to A$2.10 before falling again to end last week at A$1.39, or about where it was before the announcement. The share price for the Institute of Drug Technology (IDT) increased by around A$0.20 to finish the week at A$4.30 - a price still well under the stock's most recent high of a touch over A$5 seen in March.

The Australian group will be headed by David Cooper of the National Centre in HIV Epidemiology and Clinical Research at the University of New South Wales, with the other partners including government research organizations, the University of Melbourne, the Australian National University in Canberra, the University of Newcastle (at Newcastle in New South Wales), Sydney Children's Hospital and the Australian Federation of AIDS Organisations in Melbourne. The vaccine will be manufactured by IDT at facilities licensed by the FDA.

Virax Managing Director David Beames said he understood that about 20 groups had applied for the NIH funding.

He said he believed that one reason for the success of the Australian consortium was the reputation of the local AIDS researchers (Australia has one of the lowest incidences of HIV infection among the developed countries) and their expertise in running HIV drug trials, as well as their contacts in Asia, where the candidate vaccine likely would be tested.

But he also believed that Virax's "prime and boost," or two-stage vaccine technology, called Co-X-Gene, helped attract the NIH funding.

In the Australian approach treatment will consist of a vaccine developed for a highly conserved part of HIV , which will then "prime" the immune system against the virus.

In addition, the immune system will be "boosted" by the introduction of another vaccine consisting of a harmless, non-replicating fowl pox virus combined with three genes - two of those genes will code for the conserved parts of the virus and the third will code for a cytokine, human interferon-gamma, which boosts the production of T cells. The fowl pox virus will inject the assembly into a handy cell in the host, which will then start producing proteins to stimulate the body's immune system.

Beames said that he expected Phase I/II trials to start within about two years.

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