By Lisa Seachrist

Washington Editor

San Diego-based Epimmune Inc. and G.D. Searle & Co. finalized an agreement which could be worth more than $100 million to develop immune stimulating products for the treatment of cancer.

Under terms of the agreement, Skokie, Ill.-based Searle, a wholly owned subsidiary of Monsanto Co., of St. Louis, will make a $10 million equity investment in Epimmune, which is a subsidiary of Cytel Inc., also of San Diego. Searle also will pay Epimmune preclinical and clinical milestones that could total more than $100 million over the next 10 to 12 years.

"This is a major investment by Searle," said Deborah Schueren, president of Epimmune. "This represents the first collaboration and outside investment in Epimmune. We are very pleased to have established a major collaboration in the cancer arena."

Epimmune was created in October 1997 to create therapeutic and prophylactic vaccines against cancer and infectious diseases. The company grew out of a restructuring at Cytel Corp. following a drug development setback and the loss of two corporate partners: Pharmacia & Upjohn, of London, and Schwarz Pharma A.G., of Monheim, Germany.

Epimmune is a privately held, independently managed and independently financed subsidiary of Cytel. Epimmune was formed with support from Searle, which signed a letter of intent to collaborate on cancer vaccines. At that time, Searle bought $5 million in Cytel stock, which was used to establish Epimmune.

Under Monday's agreement, Searle purchased $6.1 million in Epimmune stock and $3.9 million in Cytel stock. Cytel controls 86.6 percent of Epimmune, while Searle controls 13.4 percent. Searle also will pay royalties to Epimmune should the collaboration result in marketable products.

In return, Epimmune has granted Searle worldwide rights to its epitope and PADRE technologies in the cancer arena, excluding rights previously granted for ex vivo treatment of cancer in Japan.

Immune System Rallied To Fight Cancer

Searle will combine Epimmune's cancer-specific epitopes, chemical groups that can stimulate targeted immune responses, and the PADRE technology — a potent, synthetic "universal" immunostimulant — with Searle's in-house cytokine program to develop immunostimulatory vaccines against cancer.

Schueren told BioWorld Today Epimmune is targeting therapies to treat breast, lung, colon, cervical and prostate cancers. She noted that an ex vivo therapy which removes immune cells from a patient, activates them against the cancer and returns them to the body would likely be the first therapy to the clinical phase.

"The combination of Epimmune technologies with Searle technologies is the basis for developing very specific cellular therapies," Schueren said. "Using these technologies we are aiming to induce precisely targeted immune responses."

Schueren said Epimmune also is evaluating use of its technology to develop specific therapeutic and prophylactic vaccines for infectious diseases, including hepatitis C, HIV, malaria and hepatitis B.

"We will be looking for corporate partners in our infectious disease program as well," she said.

Cytel's stock (NASDAQ: CYTL) closed Monday at $1.718, up $0.125. *