Gilead Sciences Inc. could earn as much as $50 million in a deal withSwiss drug maker Roche Holding Ltd. covering development of anantiviral compound for influenza.

The two companies also agreed to collaborate for three years on salesof Roche's Roferon-A for hepatitis C in the U.S.

Roferon, recombinant interferon alfa-2a, is approved for somecancers, including hairy cell leukemia and AIDS-related Kaposi'ssarcoma, and is under review by the FDA for hepatitis C, the mostprevalent form of hepatitis in the U.S.

If approved, Roferon will compete with Philadelphia-based Schering-Plough Corp.'s version of recombinant alpha-interferon, Intron-A(interferon-alpha-2b), which also is sold for hairy cell leukemia andAIDS-related Kaposi's sarcoma as well as hepatitis C.

Basel, Switzerland-based Roche's U.S. subsidiary, Hoffmann-LaRoche Inc., of Nutley, N.J., will co-promote Roferon for hepatitis Cwith Gilead, of Foster City, Calif., which will receive an undisclosedpercentage of net sales. Roche also agreed to pay Gilead anundisclosed cash amount at the end of the three-year agreement.

The flu drug development alliance with Roche focuses on Gilead'sneuraminidase inhibitor, GS 4104. Clinical trials are expected tobegin early next year.

Lana Lauher, Gilead's spokeswoman, said in preclinical animalstudies, the orally administered compound has demonstrated "potent"antiviral activity with no side effects.

Roche paid $10 million up front and agreed to make another $40million in milestone payments for worldwide commercializationrights. The Swiss pharmaceutical firm also will fund clinicaldevelopment and pay Gilead royalties on the marketed drug.

Last month, Gilead signed a $60 million deal with Pharmacia &Upjohn, of Kalamazoo, Mich., for rights to sell Vistide (cidofovir)for cytomegalovirus retinitis (CMV) outside the U.S.

Gilead, which received FDA approval for Vistide in June 1996, sellsthe drug in the U.S. for AIDS-related CMV retinitis. The teamassembled by Gilead to sell Vistide, the company's first marketedproduct, will sell Roche's Roferon if it is approved. Nearly 4 millionpeople in the U.S. are believed to be infected with hepatitis C.

Lauher said the collaborations on Roferon and the flu drug candidate,GS 4101, were negotiated simultaneously, but the agreements weremade independent of each other.

GS 4101 is the most advanced compound in a class of neuraminidaseinhibitors developed by Gilead. The deal with Roche gives it rights toGS 4101 and the related compounds. Neuraminidase is described asan enzyme involved in replication and spread of influenza amongcells.

Gilead's stock (NASDAQ:GILD) closed Monday at $28.25, up $1. n

-- Charles Craig

(c) 1997 American Health Consultants. All rights reserved.