Genelabs Technologies Inc. and the recently establishedShanghai New Drug Development Center signed anagreement last week to collaborate in the development andmanufacture of new drugs, including a lupus medication nowabout to enter Phase III clinical trials in the U.S.Genelabs (NASDAQ:GNLB) of Redwood City, Calif., willestablish joint ventures with two pharmaceutical companies inShanghai (the center of the Chinese biotechnology andpharmaceuticals industry). They will collaborate on two drugsnow being tested at Genelabs that also address public healthneeds in China.According to Irene Chow, president of Genelabs'pharmaceutical division, Genelabs will not make a heavyfinancial investment in these joint ventures. Instead, theChinese companies will benefit from technology transfer.Genelabs, however, will gain access to the Asian market,which it considers very important. Rights to the products andother terms, such as who pays for clinical trials, will benegotiated on a case-by-case basis by Genelabs and itspartners.One joint venture will focus on dehydroepiandrosterone(DHEA), a treatment for lupus. While lupus affects about150,000 people in the U.S., the condition is much morecommon and severe in China, especially among youngwomen. DHEA, a naturally occurring steroid hormoneproduced by the adrenal glands, testes and brain is present inabnormally low concentrations in lupus patients. It will beginPhase III clinicals in the U.S. within the next three months,Genelabs said.Genelabs also will collaborate with another company on thedevelopment of a hepatitis E vaccine, using recombinanttechniques. According to Chow, hepatitis E is endemic inChina. The disease caused by HEV can be severe, particularlyin pregnant women. Approximately 18 million womenbecome pregnant in China each year, all of whom couldbecome candidates for the Hepatitis E vaccine. Genelabs'vaccine is now in the last stages of animal testing in the U.S.Chow added that conducting trials in China is much cheaperthan in the U.S."In the United States, the cheapest trial is for hypertensivesand costs about $2,000 to $3,000 per participant. A cancertrial could cost $10,000. In China the cost would be only afew hundred dollars, and there is a much larger populationbase on which to draw," she said. Chow said she expected noproblems in having the results of clinical trials conducted inChina accepted by the FDA, since the FDA would look at thequality of the trials, not at the country in which they areconducted.Chow said Genelabs' Chinese operations will adhere to thesame standards as those established by the FDA in the U.S. Inaddition, there is a requirement that drugs marketed in Chinamust undergo clinical trials in the Chinese population beforethey are commercialized.According to Chow, the commercialization of Genelabs'DHEA products will take place in China.Chow said Genelabs was invited to China by the Shanghailocal government¿s Science and Technology Commission,which administers the development center. The Centerprovides project planning and other services to industry. "TheCenter can help facilitate the implementation of clinical trials,help us establish manufacturing and distribution relationsthrough joint ventures with local companies, and providecoordination with China's health ministry," Chow said.

-- Philippa Maister

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