Human Genome Sciences has amended its drug developmentcollaboration with SmithKline Beecham to give the genomicscompany more opportunity to develop its own products from genediscoveries it is generating.

Under the original $125 million deal in 1993, SmithKline, ofPhiladelphia, acquired first rights to a broad variety of drugcandidates based on the gene sequencing research of Human GenomeSciences, of Rockville, Md., and The Institute for Genomic Research,of Gaithersburg, Md.

"This doesn't replace any existing agreements," said WilliamHaseltine, chairman and CEO of Human Genome Sciences. "Thisreflects the success of the collaboration with SmithKline. It hasgenerated more opportunities than SmithKline Beecham can pursue."

The amended deal gives Human Genome Sciences exclusive rights toas many as six therapeutic proteins per year, provided the companycan generate annually a maximum of 16 potential drug targets fromits gene sequencing data base.

Under the new Therapeutic Protein Agreement, Human GenomeSciences can submit proposals for four drug targets per quarter toSmithKline and exclusive development rights will be returned onone. At the end of the fourth quarter, Human Genome Sciences wouldget a bonus of rights to two more genes. The company can eitherdevelop the drug candidates itself or license them to other partners.

SmithKline would retain first rights on the other 10 therapeuticproteins and would receive royalties on sales of products from thosedeveloped by Human Genome Sciences.

"This is a substantial step forward for Human Genome Sciences inassuring that we have our own products," Haseltine said, adding thatthe company has delivered four genes that qualify under the amendeddeal and has received the rights to one.

"This is tangible evidence that we've implemented the second part ofour strategic plan," Haseltine said. "The first step was to createdominance in human gene sequencing. The second part was to reducethat information to a useful set of tools for drug discovery."

Haseltine estimated his company has sequenced "80 percent to 90percent" of genes in the genome.

The proposal for a therapeutic protein, he said, must satisfy certaincriteria. The cDNA (complementary DNA) must be fully sequenced.The protein it encodes must be made and purified. The purifiedprotein must show, in vitro, biochemical or biological activity relatedto a medical use and a patent must be filed.

Human Genome Sciences stock (NASDAQ:HGSI) closed Monday at$13, up 37 cents. SmithKline (NASDAQ:SB) was down 37 cents to$33.50.n

-- Charles Craig

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