Vical Inc. (NASDAQ:VICL) announced late Thursday that it willreceive $1.25 million from collaborator Merck & Co. Inc.(NYSE:MRK) to extend its option on vaccines developed againstfive specific infectious disease targets.

Vical agreed to license its gene therapeutics technology, whichuses DNA and/or RNA gene sequences derived from a viralgenome, to Merck in May 1991 to develop vaccines for humaninfectious diseases. Merck originally selected two importantvaccine targets, human immunodeficiency virus and humaninfluenza virus, and now intends to develop vaccines againsthepatitis B, hepatitis C, herpes, papilloma and measles viruses,as well.

Merck's further obligations under this agreement may includepayments to Vical of additional option and license fees,milestone payments and royalties on future sales of each gene-based vaccine product directed to any of the seven targets thatis successfully developed and marketed.

Vical and Merck scientists recently published a paper in thejournal Science demonstrating that Vical's technology, gene-based vaccination (which uses naked DNA), was able to provideprotective immunity in mice against infection by influenzavirus.

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