Genelabs Technologies Inc. announced its second non-exclusiveworldwide licensing agreement concerning hepatitis X onWednesday, this time with Europe's largest diagnosticsbusiness, privately held Boehringer Mannheim America Ltd. ofBermuda.

The current agreement could be worth more than $14 millionto Genelabs of Redwood City, Calif. It includes up-front andequity payments totaling $10 million, with the remaindercoming from milestone payments as the virus is characterizedand disease tests are developed.

Genelabs will receive royalties from sales of the hepatitis Xproducts and retains rights for development and marketing ofhepatitis X confirmatory tests.

Genelabs also entered into a non-exclusive worldwideagreement in December with Abbott Laboratories, the largestdiagnostics company in the U.S., to develop and commercializeproducts for diagnosing and screening the hepatitis X virus.That agreement included equity and milestone payments thatcould exceed $10 million, as well as royalties and the rights forGenelabs to develop and sell confirmatory tests.

These tests will be more expensive than the company'sscreening and diagnostic procedures, but easier to market tothe smaller number of businesses that specialize in thatservice, Frank Kung, Genelabs' president and chief executiveofficer, told BioWorld.

Genelabs had $18 million in the bank at the end of the firstquarter and reported a net loss of $6.9 million. The infusion of$10 million is especially welcome at a time when financialmarkets are "not receptive," Kung said.

Both hepatitis X agreements were non-exclusive, he added,because Genelabs wants to control its own destiny as adiagnostics business.

Genelabs has a previous license agreement with Abbott forhepatitis E diagnostics and an agreement with SmithKlineBeecham plc for a hepatitis E vaccine. The company is alsomarketing tests itself in Asia outside Japan.

Both the hepatitis E and X discoveries evolved fromcollaborations with the Centers for Disease Control andPrevention. Genelabs is also working on hepatitis C vaccines,and is conducting research on retroviruses.

The hepatitis X virus is believed to be responsible fortransfusion-transmitted hepatitis not caused by hepatitis B or Cviruses.

Hepatitis and related diseases are a leading health threat inAsia. Worldwide, approximately 300 million people areinfected with various hepatitis viruses, and 5 million of thosecarriers live in the U.S.

Genelabs' stock closed Wednesday at $6.38 a share, up 13cents.

-- Nancy Garcia Associate Editor

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