* Axys Pharmaceuticals Inc., of South San Francisco, extended its osteoporosis drug discovery collaboration until November 1999 with Merck & Co., of Whitehouse Station, N.J. The collaboration is focused on the development of small molecule inhibitors of cathepsin K, a cysteine protease target that is believed to play a role in osteoporosis.

* Corixa Corp., of Seattle, Wash., acquired an exclusive worldwide license to therapeutic rights for the Wilm's Tumor gene (WT1) from the Massachusetts Institute of Technology, in Cambridge, Mass. Recent research showed significant over-expression of the gene product in a large percentage of patients with leukemia, including chronic and acute myelogenous leukemia and acute lymphocytic leukemia.

* CytoTherapeutics Inc., of Lincoln, R.I., obtained exclusive, worldwide licenses from the Scripps Research Institute, in La Jolla, Calif., to technology which may be useful in identifying and isolating pancreatic stem/progenitor cells.

* ImmuLogic Pharmaceutical Corp., of Waltham, Mass., sold its vaccine programs for the treatment of nicotine and cocaine addiction to Cantab Pharmaceuticals plc., of Cambridge, U.K. Cantab will pay a maximum of $9 million and up to $11 million more in milestone payments contingent upon successful development of the two programs to the end of Phase II trials.

* Kinetek Pharmaceuticals Inc., of Vancouver, British Columbia, started a Phase I study of KP-102, its drug candidate for the treatment of Type II diabetes. An investigational new drug application was filed Nov. 6. KP-102 is an orally active small molecule which has been shown to be effective in rodent models of diabetes.

* Millennium Pharmaceuticals Inc., of Cambridge, Mass., reported that Eli Lilly and Co., of Indianapolis, its partner in cardiovascular drug development, accepted two targets for drug candidate screening. Millennium has now delivered five drug targets to Lilly since the start of its collaboration in 1995. An undisclosed milestone payment was paid to Millennium. The two targets may play a role in the modulation of two key signaling pathways involved in the pathogenesis of congestive heart failure.

* PathoGenesis Corp., of Seattle, reported statistically significant results from its Phase II trial of TOBI (tobramycin solution for inhalation) in patients with bronchiectasis, a form of severe chronic bronchitis. The principal endpoint was microbiological response, as measured by changes in observed bacterial levels in the sputum (phlegm). Bacterial levels in the sputum decreased more than 99 percent on average in the TOBI treatment group at 28 days, compared to no change on average in the placebo group.

* The Immune Response Corp., of Carlsbad, Calif., eported results from a Phase IIb trial of its T-cell receptor (TCR) peptide, showing the vaccine may be a useful approach for the treatment of rheumatoid arthritis. The company intends to select a corporate partner to further develop the product.

* Variagenics Inc., of Cambridge, Mass., and Quintiles Transnational Corp., of Research Triangle Park, N.C., entered a strategic alliance for the commercialization of Variagenics' pharmacogenomics technologies in the clinical development of new pharmaceuticals. Quintiles will market Variagenics' genetic variance discovery and analysis capabilities to its customer base of pharmaceutical and biotechnology companies engaged in clinical trials. Variagenics will become a preferred provider of contract pharmacogenomics services to Quintiles' customers. Financial terms were not revealed.