By Debbie Strickland

SmithKline Beecham plc has agreed to pay upwards of $85 million plus royalties for worldwide marketing rights to MedImmune Inc.'s human papillomavirus vaccine (HPV) program, currently at the Phase I stage of clinical testing.

The agreement is MedImmune's second new big pharma partnership in less than a month. Last week, Abbott Laboratories, of Abbott Park, Ill., agreed to pay up to $60 million for marketing rights to MEDI-493 (palivizumab), a humanized monoclonal antibody that passed Phase III trials and is slated for a biologics licensing application with the FDA by year end. (See BioWorld Today, Dec. 2, 1997, p. 1.)

"These deals were larger in scope and better in their terms to MedImmune than anyone had expected," said Jay Silverman, an analyst for BancAmerica Robertson Stephens & Co., in New York. He rates MedImmune stock a "strong buy."

Silverman estimated SmithKline Beecham's up-front payment at $20 million, and noted that the London-based pharmaceutical giant will fund all research and development costs going forward.

In addition to the up-front fee and R&D support, the agreement includes potential milestones. It all adds up to a deal worth more than $85 million to the Gaithersburg, Md., biotech firm, which also will receive royalties on sales of marketed products that result from the collaboration.

SmithKline Beecham's rights to MedImmune's preventive HPV vaccines complement a $37 million deal with Cantab Pharmaceuticals plc for a therapeutic HPV vaccine targeted against genital warts. Based in Cambridge, U.K., Cantab has a variety of anti-HPV vaccines under development, including the genital warts product, which has successfully completed a Phase IIa trial.

The MedImmune agreement calls for the company to conduct Phase I and II trials and manufacture the drug for those trials, with research funding provided by SmithKline Beecham. As the products enter Phase III, SmithKline Beecham will take over development, including regulatory, manufacturing and marketing responsibilities.

The more than 75 different types of HPVs cause a range of disorders, including genital warts and cervical cancer. The worldwide market for HPV vaccines is worth in excess of $500 million, Silverman said.

As for potential competitors, Merck & Co. Inc., of Whitehouse Station, N.J., is also pursuing this untapped market, according to the analyst, and is probably at a similar stage of development. The status of intellectual property rights is uncertain, he said.

MedImmune's first HPV vaccine candidate, MEDI-501, is currently in a Phase I trial. The vaccine consists of the HPV-11 L1 capsid protein, which self-assembles into virus-like particles (VLPs). The VLPs, produced in vitro using recombinant DNA technology, imitate the structure of natural papillomavirus, but are not infectious.

In 1998, the company plans to launch Phase I studies of MEDI-503 and MEDI-504, its HPV-16 and HPV-18 vaccines.

At the Phase II level, vaccines for HPV-16 and HPV-18 — two strains linked to cervical cancer — likely will be combined into a single vaccine, as will the two separate vaccines against genital warts caused by HPV-6 and HPV-11.

SmithKline Beecham may contribute adjuvants to the final formulations, David Mott, MedImmune's president, told BioWorld Today.

"That's certainly one of the things we'll be evaluating in the clinical program over the next year or two," he said. "SmithKline Beecham has one of the broadest portfolios of proprietary adjuvants, and now we have access to that. They also have a very wide portfolio of vaccine products, so we have the potential to develop a combination product . . . That could really put some legs on our HPV vaccine."

SmithKline Beecham's vaccine arm is its biologicals division, located in Rixensart, Belgium. The division produces more than 750 million doses of vaccines annually.

That coveted market dominance makes consummation of the deal subject to a waiting period mandated by U.S. antitrust law. The companies do not expect any objection.

MedImmune's shares (NASDAQ:MEDI) closed Thursday at $38.563, down $0.25. *