Gilead Sciences Inc. and Glaxo Wellcome Inc. are extending theirsix-year collaboration in code-blocker technology another five yearsin a new deal that could be worth $75 million or more to Gilead.

The 1990 agreement between the companies is believed to be the firstcollaboration by a major pharmaceutical company in the area ofantisense technology. A Gilead spokeswoman said advances madeover the past year or two helped the partners overcome certainobstacles faced earlier in that research area.

Gilead is getting $15 million over five years in research support. TheFoster City, Calif., company already received about $21.2 millionfrom the collaboration, including an $8 million equity investmentfrom Glaxo.

"We now have in hand more potent antisense molecules andproprietary permeation enhancers, which we believe will make afundamental difference in the ability to deliver antisense moleculesand genetic materials inside cells," said Lana Lauher, Gilead'smanager, corporate communications.

Mark Simon, a managing director at San Francisco-based RobertsonStephens & Co., estimated potential milestones in the deal at $60million, meaning the collaboration could bring $75 million to alreadywealthy Gilead before any product launches. London-based Glaxohas rights to develop any resulting products and would pay Gileadroyalties on sales.

"This has been viewed as Gilead's weakest program, whichunderscores the strength of Gilead's science," Simon said."Obviously, Glaxo feels there's been substantial scientific progress."

Lauher said Glaxo's $15 million in research support will fund allGilead's work in the program. Glaxo has an option to end therelationship any time after two years.

Lauher said the work with Glaxo focuses on cell cycle genes forapplications in cancer with additional work being done in the areas ofviral infections and cardiovascular diseases.

The code-blocker program, Lauher said, as a whole is in a transitionphase _ coming out of research and into preclinical testing. Someparts of the program, however, already are undergoing preclinicalstudies, she said.

The genetic code-blocker program encompasses development ofantisense and triple-helix compounds. The antisense compounds bindto a specific portion, or string, of RNA. Triple-helix compounds aredesigned to bind to a portion of double-stranded DNA. The principalbehind code blockers, Lauher said, is that a chain of nucleotides _the building blocks of RNA and DNA _ could be designed to bindto specific portions of DNA or RNA and inhibit the production ofdisease-causing proteins.

Separately, and further along, Gilead has a program in developingsmall molecules based on single nucleotides. Its lead product,Vistide, received a unanimous recommendation for approval from anFDA advisory panel for the treatment of AIDS-relatedcytomegalovirus.

Gilead expects to start a Phase III trial of GS 840, a nucleotideanalogue that inhibits reverse transcriptase, for HIV by the end ofyear. That compound is in Phase I/II studies for hepatitis B. GS 930,a prodrug of Vistide (cidofovir) active against herpesviruses, is inPhase I studies.

PMPA, a compound related to GS 840 that's generated interestinganimal results, is expected to go into safety studies this year, Lauhersaid. In simian models of AIDS the compound proved to be 100percent protective, before and after infection, for up to 52 weeks.

Gilead, adjusting for a recent public offering, had $311 million at theend of 1995. The company's been spending about $4 million permonth. n

-- Jim Shrine

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