Unigene Laboratories Inc. has agreed to collaborate with QingdaoGeneral Pharmaceutical Co. for sale in China of the Fairfield, N.J.-based company's recombinant calcitonin for osteoporosis and otherdegenerative bone disorders.Ronald Levy, Unigene's vice president, said the deal involves up frontand milestone payments as well as royalties to his company in returnfor granting Qingdao General rights to manufacture and marketUnigene's calcitonin. Levy would not detail the financial terms of theagreement.He said Qingdao General has a factory in Qingdao, ShandongProvince, where it will make inactive calcitonin. Unigene willmanufacture and provide its proprietary enzyme to Qingdao General toactivate the peptide hormone.The marketing agreement is Unigene's first, Levy said. Calcitonin isthe company's lead product and Unigene is seeking approval to marketthe drug in the U.S. and other countries. Qingdao will assumeresponsibility for regulatory approval in China.Calcitonin already is marketed in the U.S. and elsewhere by othercompanies, including Rhone-Poulenc Rorer, of Collegeville, Pa., andSandoz Pharmaceuticals Corp., of East Hanover, N.J..Levy said Unigene developed a process of producing large quantitiesof peptide hormones for treatment of a variety of diseases. In additionto targeting bone degeneration, he said the company is developingcalcitonin gene-related peptide for treating high blood pressure.Unigene's stock (NASDAQ:UGNE) closed Tuesday at $3.25 a share,up 25 cents. _ Charles Craig

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