Eli Lilly and Co. has ended an agreement with ShamanPharmaceuticals Inc. for development of antifungal drugs based onplant extracts.Lisa Conte, president and CEO of South San Francisco-basedShaman, said Lilly, of Indianapolis, decided not to exercise itsoption to continue the program for another two years. Under thecollaboration, which began in 1992, Lilly was paying Shaman$440,000 a quarter. The loss of the agreement, Conte said, will costShaman about $3.2 million.Shaman's stock (NASDAQ:SHMN) closed Wednesday at $6, down62 cents.The research and development agreement involved using Shaman'sethnobotanical approach to drug discovery in screening plantextracts for antifungal activity. With Lilly's departure, Shamanretains worldwide rights to drug candidates developed during theagreement.Conte said the research is in the preclinical stage and Shamanremains committed to the program. She added that the company hasexpanded its focus to include a search for drugs to treat diabetes.The antifungal program funded by Lilly, Conte said, will beevaluated on a project-by-project basis."Maybe we'll continue to fund every project, but if we do,something else will have to give," she said. _ Charles Craig

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