Seragen Inc. signed a non-exclusive license agreement forworldwide rights to the interleukin-2 (IL-2) gene, just to head offany possible problems down the road.

The agreement was signed with Tokyo-based Ajinomoto Co., whichowns the patent along with the Japanese Foundation for CancerResearch. Seragen, of Hopkinton, Mass., is working with Eli Lillyand Co. in developing IL-2 fusion toxin molecules.

Helen Maslocka, Seragen's vice president for investorrelations/corporate communications, told BioWorld that the companywas advised by counsel that it didn't need to get the license to thegene. "But, being a small company, we felt it was worth it to us justto get it over with," she said. "It gives us a clean slate in terms ofpatent issues." Terms of the agreement were not disclosed.

Seragen already has received $10 million from Indianapolis-basedLilly resulting from an agreement finalized in August. Initially, thecollaboration is focusing on developing IL-2 fusion toxin foroncological indications. Lilly has the option to acquire rights to themolecule for other non-dermatological indications, for $5 million perindication.

Fusion toxins consist of a toxin fragment genetically fused to ahormone or growth factor that targets specific cell-surface receptorson disease-causing cells. Seragen is in discussions with the FDAabout a Phase III trial using the molecule for cutaneous T celllymphoma, Maslocka said.

Seragen is in or has completed Phase I/II studies of IL-2 fusion toxinin psoriasis, Type I diabetes, HIV, rheumatoid arthritis and cancerindications. "Our plan, with Lilly, is to move ahead aggressively andexploit all the IL-2-expressing malignancies," Maslocka said.

Seragen's second product candidate, epidermal growth factor (EGF)fusion toxin, is in Phase I/II study in solid tumors. Lilly has theoption to gain rights to EGF fusion toxin after Phase II studies arecomplete.

Seragen stock (NASDAQ:SRGN) was down 50 cents Tuesday,closing at $4.75. _ Jim Shrine

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