Genetic Therapy Inc. (GTI) said Wednesday that it signed anagreement with Sandoz Pharma Ltd. to develop and market genetherapy products based on GTI's HS-tk technology for cancertreatment.GTI, of Gaithersburg, Md., will get an up-front payment in excess of$6 million and milestone payments up to $12 million for the braincancer therapy product, which is in Phase I/II clinicals. Subsequent HS-tk (herpes simplex-thymidine kinase gene) products, if developed,would involve separate up-front and milestone payments.The collaboration is the second between GTI and Swiss-based Sandoz.In a three-year deal signed in 1991, Sandoz purchased $10 million ofGTI stock. Sandoz also was set to provide up to $13.5 million overthree years to fund two projects, one dealing with cancer and one withcardiovascular disease.The focus of research under the 1991 collaboration remainsundisclosed. But GTI, with the announcement of the new collaboration,said Sandoz no longer will be involved in the cardiovascular program.GTI will receive three months of research payments from Sandoz, andretain all rights to the project."The effort in the cardiovascular area was tabled to put the fullemphasis in the area of cancer research," Bill O'Donnell, a spokesmanfor Sandoz, told BioWorld."We've had a productive relationship with Sandoz, and this is animportant project for us," Marc Schneebaum, GTI's chief financialofficer, told BioWorld, referring to the HS-tk program, which isfurthest along in the company's pipeline. Schneebaum said the newHS-tk collaboration is completely independent of the initial cancerproject.In GTI's protocol for the brain cancer product, patients receive cellsthat produce vectors containing the HS-tk gene. The vectors transferthe gene into tumor cells, making them susceptible to the antiviral drugganciclovir, which then is administered to the patients to destroy tumorcells. Fifteen patients have been treated to date in the Phase I/II trial.The new agreement with Sandoz calls for a 50-50 co-promotion in theU.S., and GTI would record all sales from the first HS-tk product, thenshare profits with Sandoz. The companies will share U.S. developmentand marketing costs. Outside the U.S., Sandoz will have exclusivemarketing rights, fund development and marketing, and pay GTI aroyalty on sales. GTI also has the right to manufacture all products tobe marketed worldwide, and would receive a manufacturing profit onproduct supplied to Sandoz.GTI has filed an investigational new drug application for another phaseI/II trial using HS-tk for patients with operable brain tumors. Aseparate multi-site trial for patients with inoperable brain cancer isbeing planned, Schneebaum said.GTI (NASDAQ:GTII) stock closed at $11.75, down 25 cents. n

-- Jim Shrine

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