Vertex Pharmaceuticals Inc. and its corporate partner, GlaxoWellcome plc, moved to head off any future intellectual propertydispute over their HIV protease inhibitor by paying $25 million toG.D. Searle & Co. for a worldwide license to its patent applicationson a similar AIDS drug.

London-based Glaxo _ which currently sells HIV reversetranscriptase inhibitors, AZT and 3TC, _ is evaluating Vertex'sprotease inhibitor in a Phase I/II study.

Searle, which used to have an HIV protease inhibition program, haspatent applications on file in the U.S. and Europe for a specificcompound and broad generic variations. Searle, of Chicago, is asubsidiary of Monsanto Co., of St. Louis.

Lynne Brum, Vertex's director of corporate communications, said thegeneric claims do not mention the Vertex-Glaxo compound. But sheadded the two companies decided the Searle patent could beinterpreted to cover their drug and they wanted to avoid potentiallylengthy and expensive patent litigation.

To secure a non-exclusive license from Searle, Vertex, of Cambridge,Mass., paid $15 million and Glaxo contributed $10 million. One-third of Vertex's portion was offset by a $5 million equity investmentfrom Glaxo, which purchased nearly 152,000 shares. The $32.94 pershare paid by Glaxo was an 8 percent premium to the $30.38 closingprice for Vertex's stock (NASDAQ:VRTX) Friday. Vertex endedMonday up $2.62 to $33.

Brum said the licensing deal was completed Friday and Vertex's cashpayment will be reflected in its fiscal statement for the second quarterof 1996 ending June 30.

As of March 31, 1996, Vertex had $77 million in cash and a net lossof $7.5 million for the first three months of the year.

Protease inhibitors are among the newest class of AIDS drugapproved by the FDA. Roche Holding Ltd., of Basel, Switzerland,received marketing clearance for its protease inhibitor in December1995. Two others sold by Merck & Co., of Whitehouse Station, N.J.,and Abbott Laboratories, of Abbott Park, Ill., were approved earlierthis year.

Both reverse transcriptase inhibitors and protease inhibitors interferewith HIV replication; the former attacks the beginning of the processand the latter strikes near the end.

Searle officials said Monday they do not know if their patentapplications affect other companies' protease inhibitors.

Searle ended its HIV protease inhibitor program in 1994. Officialssaid they have several protease inhibitor compounds and areexploring the possibility of licensing them to other companies fordevelopment. n

-- Charles Craig

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