By Jim Shrine

Corixa Corp. signed its second deal in three weeks covering rights to therapeutic lung cancer vaccines, this one a potential $40 million collaboration with Japan Tobacco Inc.

The deal with Japan Tobacco and a $21.5 million deal signed last month with Zambon Group SpA cover rights to most of the world. Japan Tobacco got rights in Japan and North America, and co-exclusive rights with Zambon in China. Zambon got rights in Europe, former Soviet Union countries and some of South America.

"If you add the two of them together it's north of $60 million for a single product," said Steven Gillis, Corixa's chairman and CEO. "It was a way for us to leverage additional value to the technology by having two different partners, both of which are highly committed to the area."

Gillis said a "significant portion" of the $40 million from Japan Tobacco is guaranteed, and includes an up-front element, research funding to cover eight to 14 full-time-equivalent scientists, and milestone payments as a vaccine candidate moves through the clinic. Both the Japan Tobacco and Zambon deals include royalty payments to Corixa.

The lung cancer vaccine program still is in the research phase. Gillis said, "We've done some work in that area and identified some candidate antigens. It's the beginning of the antigen discovery process. There's a considerable amount of preclinical work left to do."

The $61.5 million total of the deals is relatively large for a product in such an early stage of development.

"Partners are coming around, hopefully, to the value of our technology and the capabilities we've demonstrated in the area of antigen discovery," Gillis said, "and want access to that technology, together with our adjuvants and delivery systems. They are making a bet, along with us, that defined antigen vaccines will represent products of significant value in the future."

The deal with Zambon, of Milan, Italy, included a $2 million equity investment. A company official said then a goal was to develop a cocktail of antigens to be used in a vaccine. (See BioWorld Today, May 25, 1999, p. 1.)

Peter Drake, a vice president at Vector Securities International Inc. in Deerfield, Ill., reiterated his buy rating on the company after the deal with Tokyo-based Japan Tobacco. He estimated in a reseach report that license and research funding of about $3 million this year and for each of the next two years.

Drake wrote, "Although the product is preclinical, we believe the territory-specific approach provides Corixa with greater region-specific marketing capabilities as Zambon is established in Europe in respiratory indications and Japan Tobacco's Asian presence should eventually facilitate commercial efforts. The two deals provide significant capital contribution for an early-stage product, and together may provide more funding than if a single partner had worldwide rights."

Corixa's stock (NASDAQ:CRXA) fell 12.5 cents Wednesday to close at $12.625.