Vical Inc. has signed a collaborative research agreement withBaxter Healthcare Corp. for Vical's gene therapy technologytargeted at hemophilia.

Under the agreement, announced Tuesday, Baxter will jointlydevelop the technology with Vical in exchange for the right toan exclusive license. Vical (NASDAQ:VICL) of San Diego willreceive an undisclosed initial payment, and if Baxter exercisesits option to license the technology, Vical also will receivemilestone and royalty payments.

This is Baxter's second agreement with a biotechnologycompany for developing hemophilia gene therapy. Last monththe company signed an agreement with Somatix Therapy develop a therapy that would utilize Somatix's retroviralvector and Baxter's membrane device (see BioWorld, Nov. 4).Somatix's retroviral vector MFG will deliver factor VIII geneinto a cell line that would then be incorporated into Baxter'sdevice for insertion into patients.

Vical's technology injects non-viral gene sequences directlyinto tissues that are thereby triggered to make correspondingproteins. Gene sequences encoding the human clotting proteinsfactor VIII and factor IX will be used in the hemophiliatherapy. (People with hemophilia lack these blood-clottinggenes.) Vical is currently in animal studies with the genetherapy.

Under the agreement with Baxter, Vical will cut and pastesequences that encode factor VIII and factor IX into one of itsexpression vectors, grow the sequences in large quantities, andsupply the material to Baxter for in vitro and animal studies.Baxter of Round Lake, Ill., will also conduct clinical trials withthe therapy. Vical will receive an initial payment from Baxter,some research funding, and milestone and royalty payments.

Vical's first gene therapy is directed toward malignantmelanoma and other cancers. It involves direct injection intothe tumor of a gene encoding HLA-B7, an antigen responsiblefor immune response such as in organ transplant rejection.Gary Nabel of the University of Michigan has been conducting aclinical trial with the therapy, and in December, the NationalInstitutes of Health's Recombinant DNA Advisory Committeeapproved Vical's protocol to test the therapy in patients withcolorectal cancer metastasized to the liver.

Several other companies also are working on hemophilia genetherapy. In January, Viagene Inc. signed an agreement withMiles Inc. to develop a therapy using retroviral vectors to treatdeficiencies in factor VIII. CytoTherapeutics Inc. and GeneticTherapy Inc. also have an agreement to develop hemophiliagene therapy using CytoTherapeutics' cell encapsulationtechnology.

Vical's stock gained $1.50 a share on Tuesday, closing at$12.50.

-- Brenda Sandburg News Editor

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