London - Peptide Therapeutics Group plc said it was in preliminary talks that could lead to a bid being made for the company, as it released positive Phase I results of its oral vaccine for the treatment of travelers' diarrhea.

Gordon Cameron, finance director, declined to give any further details of the bid talks.

Shares in the company rose by 17.5 pence to #1.16 on Thursday when the announcement was made. The price has edged up from 60 pence at the end of January, but it is still significantly below the 1995 flotation price of #2.

Earlier last week Peptide announced the sale of its drug discovery arm, Mimetrix, to Medivir AB, of Stockholm, Sweden, for #2 million (US$3.2 million) in shares and a potential #4 million in milestone and royalty payments. The sale cleared the way for Peptide, based in Cambridge, to focus on vaccines, and cut the company's cash burn from #1.1 million to #700,000 per month.

The Phase I randomized, double-blind, placebo-controlled study of the oral ETEC (enterotoxigenic E. coli) compared two different vaccine constructs in 40 healthy volunteers. The objective was to confirm safety and immunogenicity and select one of the constructs for further development. Both constructs are derived from a single, live, ETEC strain, but are attenuated by different gene deletions.

The preferred construct showed a significantly higher immune response, which was equivalently strong whether one or two doses were given. This now will be taken into a proof-of -concept efficacy trial in which volunteers will be vaccinated and then challenged with a virulent strain of ETEC. The trials are being conducted at Johns Hopkins University in Baltimore.

Cameron told BioWorld International that at the same time the company will develop a multistrain vaccine formulation incorporating the five most common ETEC strains. "We will knock out the same gene in each strain, and hope to do a similar safety trial early in 2001. Although there are hundreds of ETEC strains, the literature indicates those we have selected are the most common ones associated with travelers' diarrhea." Peptide believes it needs an effective protection rate of at least 75 percent.

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