By Karen Pihl-Carey

In an effort to speed the development of novel genes as drugs, Human Genome Sciences Inc. (HGS) and Vical Inc. decided to combine their technologies in a strategic collaboration.

Vascular Genetics Inc. (VGI), a private company spun off by HGS in 1997, also will benefit from the collaboration, using Vical's naked DNA delivery technology for vascular endothelial growth factor-2 (VEGF-2).

Under the collaboration, HGS receives the option to license Vical's naked DNA gene delivery technology for use in up to three gene-based products, while Vical receives the option to exclusively license up to three genes from the HGS proprietary genomics database. The collaboration involves no money initially, but could mean reciprocal product development milestones and royalties later. Financial details were not disclosed.

"We're taking part in a new trend in which leading-edge companies rich in technology recognize each other's strength and collaborate to create new product opportunities," William Haseltine, chairman and CEO of HGS, of Rockville, Md., told BioWorld Today. "This is something new in the world. Biotechnology companies used to look exclusively to major pharmaceutical companies as partners. But we, as we have pioneered so many other things, have pioneered a new type of relationship."

Alain Schreiber, president and CEO of San Diego-based Vical, said the financing floodgates have opened for biotechnology companies, making alliances such as this one easier to attain.

"With the financing that's been available, we raised $125 million earlier this year," he told BioWorld Today. "HGS has raised several series of convertible debt. We now are able to take the information and the enabling technology to build a pipeline of products. It's no longer just being at the mercy of the big pharmaceutical companies."

In addition to signing a reciprocal royalty-bearing license with HGS, Vical is granting an exclusive, royalty-bearing license to VGI for naked DNA delivery of VEGF-2, which is in Phase I/II trials to promote angiogenesis in patients with coronary artery disease and critical limb ischemia. In exchange, Vical receives a minority equity interest in VGI, of Research Triangle Park, N.C.

HGS teamed up with a research hospital and contract research organization to form VGI in 1997. It is a major shareholder in VGI, which was made responsible for developing and commercializing a vascular-disease gene therapy based on VEGF-2. (See BioWorld Today, Nov. 11, 1997, p. 1.)

Also, as part of the collaboration, HGS may choose to co-develop the Vical products, Haseltine said.

"I believe it's a very good deal for both sides," he said. "It combines two leading-edge technologies to create a new opportunity for both of us that didn't exist before."

Haseltine said of the seven genes involved in the collaboration, six have yet to be identified. But Schreiber said Vical's three genes likely will somehow fit into the company's oncology franchise.

"We'll have to choose prudently," he said. "One, because you can't start working on too many things at the same time, and two, for me, it's like landing in the candy store. There's just so many opportunities."

Vical's naked DNA delivery technology has the potential to be used where recombinant proteins are not suitable, Schreiber said. He added that the companies may be able to expand their relationship in the future for additional products.

Haseltine said the collaboration with Vical is similar to other collaborations HGS has with such companies as Transgene, of Strasbourg, France; Abgenix Inc., of Fremont, Calif.; Cambridge Antibody Technology Group plc, of Melbourn, UK; and Praecis Pharmaceuticals, of Cambridge, Mass.

"I believe that there will be many such future relationships open to us because we have a key resource that many company's need," he said. "That is proprietary rights to human genes and proteins of medical use. We currently have filed patents that describe the biological function and medical utility of more than 7,000 newly discovered full-length human genes."

Vical's stock (NASDAQ:VICL) closed Friday at $61.50, up $4.25, while HGS' stock (NASDAQ:HGSI) closed at $206, down $12.06.