Genetics Institute Inc.'s largest shareholder, American Home ProductsCorp., has agreed to pay the Cambridge, Mass.-based company $20million and share future expenses in an effort to develop recombinanthuman interleukin-12 (rhIL-12) for treatment of cancer, HIV infectionand other diseases.Genetics Institute said the $20 million cash payment, which will bemade during the third and fourth quarters of this year, is areimbursement of research and development expenses incurred by thecompany and includes some initial milestone payments.Under terms of the agreement, expenses for the continueddevelopment of rhIL-12 will be shared equally by Genetics Instituteand American Home Products' pharmaceutical division, Wyeth-AyerstLaboratories, of Philadelphia. The deal also will pay Genetics Instituteadditional milestone payments, but the company said it could notdetail those amounts.The total value of the collaboration through the development andregulatory approval stages could be worth as much as $300 million toGenetics Institute, according to Gina Brazier, the company's managerof corporate communications.If any products are developed, Genetics Institute will have marketingrights in North America and Wyeth-Ayerst will market the drugsoutside North America and Japan.Phase I trials of rhIL-12 currently are under way to evaluate safety inHIV-infected and cancer patients. Those studies are expected to becomplete next year.Based on the results, Brazier said that Phase II trials would be initiatedfor both HIV and cancer.Genetics Institute described IL-12 as a complex protein that activatesthe immune system's production of certain white blood cells, whichkill bacteria, parasites, viruses and cancerous cells. In test-tubeexperiments, the company said, rhIL-12 restored normal immunefunction to blood cells from HIV-infected people. And in pre-clinicalmodels of various cancers, the recombinant protein showed it mayshrink or eliminate tumors.American Home Products owns a 64 percent interest in GeneticsInstitute. The two are also involved in research involving smallmolecule drug discovery. n

-- Charles Craig

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