Lidak Pharmaceuticals continued the worldwide positioning of itsanti-viral agent with Monday's agreement with Japan-based GrelanPharmaceutical Co. Ltd.Grelan, of Tokyo, gained development and marketing rights in Japanto Lidakol (n-docosanol), which is in late-stage testing for variousherpes indications. Lidak, of La Jolla, Calif., gets an undisclosed up-front licensing fee, milestone payments and "very healthy" royaltyrates, David Katz, Lidak's president and CEO, told BioWorld."Our deal with Grelan is a very attractive one," Katz said. "We areparticularly pleased with the mode of business activity andphilosophy at Grelan," which assumes responsibility for clinicaldevelopment in Japan. Grelan uses the sales force of TakedaChemical Industries, the largest drug company in Japan, for itsmarketing, Katz said.Lidakol is a long-chained fatty alcohol that acts by interfering withviral entry into target cells, Katz said. Through European licensingpartner, Yamanouchi Europe of the Netherlands, Lidakol is in aPhase III trial there for oral herpes. A Phase II U.S. trial of the creamformulation is ongoing, and the company is preparing separate PhaseIII U.S. trials in oral herpes and genital herpes.In September Grelan purchased $2 million of Lidak stock,representing less than 2 percent of Lidak's 28.5 million sharesoutstanding. CTS Chemical Industries of Israel has rights to theproduct in that country, and Boryung Pharma Co. Ltd., of Korea, hasgained rights there.As for the U.S. market, "Our plan is predicated on the fact that we'renot going to be able _ nor would it be wise to contemplate _ tobuild a sales force for marketing in the United States," Katz said."It's possible we could reserve a niche market."Lidak's stock (NASDAQ:LDAKA) was up 31 cents (15 percent)Monday, closing at 2.38 per share. _ Jim Shrine

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