Aphton Corp. signed a potential $15 million deal with SmithKline Beecham plc to market Aphton's Gonadimmune vaccine for cancer.

Under the exclusive worldwide rights agreement, SmithKline, of London, bought 237,867 Aphton shares for $5 million and has an irrevocable two-year option to buy another $5 million worth of stock. If SmithKline exercises that right, it has 90 days to make a third purchase of shares for $5 million for a total equity investment of $15 million.

Miami-based Aphton's stock (NASDAQ:APHT) jumped $2.75 Friday to close at $17.625.

Instead of the standard practice of up-front and milestone payments, Aphton opted for a financial deal based on product sales.

The agreement covers the diagnosis, treatment and prevention of gonadotropin releasing hormone (GnRH)-related cancers, including prostate, breast, ovarian and endometrial — and other diseases such as endometriosis, polycystic ovaries, uterine fibroids, infertility and precocious puberty.

New York-based Morgan Stanley Dean Witter analysts, who recently started covering Aphton, said that considering the multibillion-dollar market opportunity, the company's earnings could be "significant" beginning in fiscal 2003.

The two companies will collaborate on product development and clinical trials with SmithKline funding the program. They expect to begin Phase I/II trials in the U.K. for prostate cancer shortly.

Gonadimmune, a vaccine consisting of synthetic peptides, induces antibodies to neutralize GnRH, shutting down production of estrogen, progesterone and testosterone in the gonadal organs. Blocking GnRH has been shown to be effective in the treatment of prostate and breast cancers. — Mary Welch