Genentech Inc. moved to jump-start the stalled development of itsAIDS vaccine by forming a new company, called Genenvax Inc., totake control of the project and conduct Phase III efficacy trials.

The vaccine uses a protein, called glycoprotein 120, from the surfaceof HIV to generate antibodies that, in theory, would protect peoplefrom the virus. Glycoprotein (gp) 120 is a major envelope proteinthat smuggles HIV into immune system cells.

Genentech, of South San Francisco, and Chiron Corp., of Emeryville,Calif., have evaluated gp120 vaccines in Phase I and Phase II trials.Development stalled in 1994 after the National Institutes of Health(NIH) put on hold indefinitely funding for large scale Phase IIIstudies.

The NIH's National Institute of Allergy and Infectious Diseases, afterexamining results of the Phase I and II trials of the gp120 vaccines,concluded in June 1994 the data were not promising enough to justifythe expense of large scale studies.

Chiron has been working with Pasteur Merieux-Connaught, ofSwiftwater, Pa., for about two years using a combination of HIVvaccines. The companies currently are discussing with the NIH thepossibility of starting Phase II trials.

The Chiron-Pasteur Merieux approach involves what the companiescall a "prime-plus-boost" protocol. In the regimen, people first wouldbe immunized with a canarypox genetically engineered to expressHIV proteins, followed by a booster of the same vaccine. Then theywould receive Chiron's gp120 vaccine with an adjuvant.

Genentech Will Support Genevax Effort

Genentech, in trying to continue development of its gp120 vaccine,agreed to license Genenvax exclusive rights to gp120 and its use as avaccine.

Genentech also will provide $1 million in seed capital and willcontribute another $1 million to a pool of private financing Genenvaxwill attempt to raise. Genenvax's goal is to generate $18 million, inaddition to Genentech's $2 million, within the next year.

Genentech officials said rights to the vaccine and financial supportare dependent on Genenvax securing financing from other investors.

Robert Nowinski, who has founded several biotechnology companiesand is chairman emeritus of Seattle-based PathoGenesis Corp., ischairman of Genenvax. Donald Francis, who guided clinicaldevelopment of Genentech's gp120 vaccine, is president. Genenvaxwill be headquartered at Genentech.

Nowinski told BioWorld Today $20 million should be enough toconduct Phase III trials of the gp120 vaccine in the U.S. andThailand.

Genentech will have a 25 percent stake in Genenvax. Although otherterms of the relationship are not definite, Nowinski said Genentechcould end up with options to manufacture and sell the vaccine.

Genenvax, Nowinski said, is not designed as an off-balance sheetfinancing scheme in which Genentech would buy back the companyif the Phase III trials were successful. However, he added, Genenvaxis not being set up as a general vaccine company.

Genenvax would own the gp120 vaccine, Nowinski said, and wouldcontinue to explore ways of exploiting the various roles played bygp120 in HIV infection.

Genentech's stock (NYSE:GNE) closed Tuesday at $54.75, down 37cents. n

-- Charles Craig

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