Sequus Pharmaceuticals Inc. exercised an option to license aliposome-CD4 technology from Sheffield Medical Technologies Inc.

Sequus, of Menlo Park, Calif., had a 30-day option to the sublicense.It is paying Sheffield a signing fee in the form of common stock.Sheffield, of New York, also can get milestones and sales royalties.Specific terms were not disclosed.

"We had the opportunity to get several of the leading authorities inAIDS research to review the data," said Scott Minick, president andchief operating officer at Sequus. "Our conclusion is that it's apromising technology we should pursue."

The technology involves incorporation of CD4 antigens intoliposome bilayers and their use as a treatment for HIV/AIDS. It isbeing developed to target infection systemically, including in thelymphatic system. The liposome-CD4 also may be loaded withcytotoxic agents.

When unbound HIV comes in contact with liposome-CD4, the virusfuses with liposome-CD4 and is inactivated, Sheffield said. Theremains then would be removed by white blood cells.

Sequus said the liposome CD4 technology combined with its Stealthlong-circulating liposome technology could offer a promising newapproach.

"Existing data indicates that Stealth liposomes accumulate inperipheral lymphatic tissues, such as regional lymph nodes, where theHIV virus is believed to concentrate and replicate," said SequusChairman and CEO I. Craig Henderson. "The expectation is thatStealth liposome-targeted delivery of CD4, the natural binding sitefor HIV on T cells, to the location where the virus concentrates _lymph nodes _ may provide a new way to treat AIDS or prevent theprogression of HIV to AIDS.

"Earlier non-liposomal versions of CD4-based therapy did not reachlymphatic tissue in effective therapeutic concentrations," Hendersonsaid. "Stealth liposome technology may present a viable way toaddress this problem."

Minick said additional formulation work and preclinical tests must becompleted, but the product could move quickly into clinical testing.

He said another benefit of the deal is its potential to expand Sequus'technology.

"There's been a number of biotech products, such as cytokines, thathave been limited by short half-lives or the inability to deliver totarget sites," Minick said. "One of the attractive elements to Sequusis the ability to work on liposomal delivery of proteins to target sites,which potentially broadens the application of our technology."

As part of the Sheffield deal Sequus will fund certain CD4-relatedwork being done under the direction of Y. Claude Nicolau, directorof the Center for Blood Research Laboratories, a Boston-basedaffiliate of Harvard Medical School.

-- Jim Shrine

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