Shaman Pharmaceuticals Inc. announced Thursday anagreement with Eli Lilly and Co. to explore plant extractsexhibiting anti-fungal activity.

Lilly made a $4 million equity investment in Shaman,representing a 6.5 percent stake. Lilly also will fund a four-year renewable research and development collaboration for anundisclosed sum in return for an option to obtain exclusiveworldwide marketing rights to certain identified anti-fungalproducts.

Under the terms of the agreement, Shaman of San Carlos, Calif.,will identify, isolate and provide initial screening for plantextracts. Lilly will further investigate resulting compounds anddevelop them with the option to market promising candidatesfor systemic fungal infections in return for milestonepayments. The manufacturing rights for each commercializedcompound will be determined on a case-by-case basis.

Shaman's ethnobotanical approach to drug discoverysignificantly reduces the screening process involved indiscovering lead compounds. "This is important," said LisaConte, Shaman's president and chief executive officer,"especially since the need for new anti-fungal compounds iscritical with the increased incidence of diseases such as cancerand AIDS."

Excluded from the collaboration is a topical anti-fungal in latepreclinicals that Shaman has chosen to pursue because of itsniche application.

According to a Shaman representative, Lilly's interest in thedeal is for broad-spectrum, orally active agents, specifically fordrugs to treat serious systemic infections such as candida,aspergillus and cryptococcus, which are primarily present inimmunosuppresive patients such as AIDS, organ transplant orchemotherapy patients, and acutely ill patients on a broad-spectrum antibiotic therapy.

The Lilly agreement is Shaman's second corporate deal. Itsfirst, announced in September 1991, was an undisclosed equityinvestment with the plant pharmaceutical manufacturerInverni della Beffa of Italy.

-- Michelle Slade Associate Editor

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