Procept Inc., which entered into a drug discoverycollaboration in 1993 with Sandoz Ltd. targetingautoimmune diseases and organ transplant rejection, willreceive $2.2 million from the Swiss pharmaceuticalcompany to extend the agreement a third year.

The Sandoz alliance focused on using Procept's expertisewith T cell receptors to develop small moleculecompounds that inhibit CD4 and CD2 receptors. BothCD4 and CD2 are involved in immune system responsesleading to diseases, such as rheumatoid arthritis, and tograft rejection in organ transplants.

Since the collaboration was formed two years ago,Sandoz has paid $14 million to Procept. The Cambridge,Mass.-based company will receive the other $2.2 millionin funding this month.

Procept President and CEO Stanley Erck said that underterms of the extended agreement, if no lead compound isfound for CD2 by September 1996, that portion of thedrug discovery program will end. On the CD4 inhibitors,he added, the two companies have agreed to considercontinuing the collaboration following the currentextension.

Procept, on its own, is targeting CD4 receptors for thedevelopment of an AIDS drug. The company recentlystarted Phase I/II trials with PRO 2000, which is a smallmolecule designed to bind to the receptor and preventHIV from infecting T cells.

Procept's stock (NASDAQ:PRCT) closed Thursday at$6.75, up 13 cents. _ Charles Craig

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