Applied Immune Sciences Inc., which received FDA approval tobegin new clinical trials of its AIS CELLector in leukemia, reachedthe second of three milestones in its collaboration with Rhone-Poulenc Rorer Inc., triggering another $21.5 million equityinvestment.

The new leukemia studies will involve using Applied ImmuneSciences' AIS CELLector CD8 device to deplete harmful T cellsfrom donor peripheral blood for infusion in patients who haveundergone allogenic bone marrow transplants. The purged peripheralblood is designed to enhance the patient's immune response.

Thomas Okarma, Applied Immune Sciences' CEO and chiefscientific officer, said the trial involves a secondapplication of the CELLector CD8 device in allogenic bone marrowtransplants. The first application involves removal of unwanted cellsfrom the donor bone marrow. A third trial, to begin this summer, willagain test the CELLector CD8 in use with donor peripheral blood forinfusion in leukemia patients who experience relapses.

The three applications would give Applied Immune Sciences a multi-step therapy for improving leukemia patients' response to allogenicbone marrow transplants. For each patient, the peripheral blood andbone marrow would come from the same donor.

The company's CELLector CD8 device is in Phase III trials forallogenic bone marrow transplants. The CELLector also is used toisolate and reinfuse desired immune system boosting cells fortreatment of AIDS and metastasized kidney cancer.

The device is in Phase III trials for treatment of kidney cancer. Inthose studies, the CELLector is used to isolate CD8+ tumorinfiltrating lymphocytes (TIL) from patients' tumors. The TIL cellsare activated with interleukin-2 and then reinfused to attack themetastasized cancer.

Okarma said the CELLector is only one part of the company's celltherapy business.

Rhone-Poulenc Rorer, of Collegeville, Pa., will purchase 1 millionshares of Applied Immune Sciences, of Santa Clara, Calif., with itssecond milestone payment, boosting the pharmaceutical company'sownership to 47 percent.

Applied Immune Sciences achieved its first milestone in October1994. That payment of $21 million also involved the purchase of 1million shares and gave Rhone-Poulenc Rorer, which is a subsidiaryof France-based Rhone-Poulenc Group, a 42 percent stake.

The two companies began their collaboration in September 1993when Rhone-Poulenc purchased 37 percent of Applied ImmuneSciences for $113 million.

Okarma said the second milestone payment of $21.5 million gives hiscompany enough cash to keep operating into mid-1997. Thecompany's cash balance at the end of the first quarter was $30million. That figure includes a $20 million loan, which was part ofthe original deal with Rhone-Poulenc and which became availablethis year.

The third milestone, Okarma said, should be reached in 1996. It callsfor Rhone-Poulenc to buy another 2 million Applied ImmuneSciences shares for between $23 and $25 per share. Rhone-Poulencalso has the option of buying another 2 million shares to bring itsownership interest up to 60 percent.

Applied Immune Sciences stock (NASDAQ:AISX) closed Monday at$5, up 25 cents. Rhone-Poulenc (NYSE:RPR) was at $42.25, up 12cents. n

-- Charles Craig

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