Vertex Pharmaceuticals Inc. and Wellcome plc have joinedforces to develop orally active protease inhibitors for treatingHIV infection and AIDS.

Wellcome (NYSE:WEL) will pay rational drug-design companyVertex up to $42 million over the length of the collaboration,including an up-front payment of $15 million, as well asresearch support and payments for developmental milestones.Wellcome also will fund all developmental activities at bothcompanies, including any clinical trials that might ensue.

This gives Wellcome, which already markets AZT -- the mostwidely used anti-HIV drug to date -- another avenue toexplore for developing anti-viral drugs. The London-basedpharmaceutical giant "has an active interest in proteaseinhibitors but has never mounted a program per se," accordingto Vertex's president and chief executive officer, Joshua Boger.

Vertex (NASDAQ:VRTX) and Wellcome will jointly developVertex's HIV protease inhibitors, the most advanced of whichare in preclinical studies. The compounds, which Vertex createsvia structure-based rational drug design, are created tointerfere with one of the enzymes necessary for replication ofHIV.

The companies also will undertake a joint five-year researchprogram to design and develop other HIV protease inhibitors.

Wellcome will receive exclusive rights to develop, manufactureand market Vertex's HIV protease inhibitors in the U.S., Europeand other countries outside the Far East. Vertex will receive aroyalty on Wellcome's sales of products emerging from theprogram and retain certain rights to manufacture and co-promote the products.

In this way, Wellcome will essentially be funding everything,according to Boger. "It's picking up everything from the formalstart of preclinical research forward," he told BioWorld.Wellcome is even funding the preclinical costs for futurecompounds, he said.

While Wellcome has not yet taken an equity position in Vertexof Cambridge, Mass., it does have the option to participatethrough the fall of next year in an equity offering up to 1.5million shares, Boger said.

The agreement with Wellcome is Vertex's fourth collaborationwith a pharmaceutical company. In September it signed a $30million agreement with Roussel Uclaf to develop drugs fortreating acute and chronic inflammatory diseases such asrheumatoid arthritis, psoriasis and inflammatory boweldisease. These drug candidates will be designed to target theinterleukin-1 receptor. Vertex also has a $30 million agreementwith Chugai Pharmaceuticals Co. Ltd. on immunosuppressiveagents and a $20 million agreement with the Japanesecompany Kissei Pharmaceutical Co. Ltd. to develop HIVprotease inhibitors. Kissei has marketing rights in Japan andthe People's Republic of China, with an option for other FarEastern countries.

As of Sept. 30, Vertex reported $42.6 million in cash and short-term investments. The company's net loss for the quarter was$2.7 million.

The stock gained $2 a share on Thursday, closing at $17.50.

-- Jennifer Van Brunt Senior Editor

(c) 1997 American Health Consultants. All rights reserved.