British Bio-technology Group plc announced Monday that it willbegin work this week in a new laboratory dedicated to viralengineering, as part of a five-year research collaboration withOxford University to pursue new treatments for viral infectionsand cancer.

BBL has committed $3.18 million to the project, part of whichhas been used to fund the new facility within the university'sbiochemistry department. The remainder, according to AlanKingsman, director of the new laboratory, will be sufficient tofund up to 10 scientists for the duration of the collaboration.

Under the agreement, BBL (NASDAQ:BBIOY) of Oxford willretain exclusive worldwide rights to develop and marketproducts resulting from the agreement, and the university willreceive royalties on sales.

Kingsman told BioWorld that the first stage of the project willlook at the basic biology of retroviruses to develop ways to"engineer" human or animal cells to produce safe, non-infectious virus particles.

The research will focus on how the protein and RNA moleculesof the viral core assemble into a particulate structure and howthat structure becomes associated with its surface envelopeproteins.

"We need to understand enough about surface proteins ofretroviruses and how they become associated with retrovirusparticles to be able to replace those surface proteins with asurface protein of our choice," said Kingsman.

The first products from the research are likely to be newvaccines composed of BBL's proprietary virus-derived particles(VDP). They will lack any potentially dangerous genes but willcarry complex glycoprotein antigens in place of their normalenvelope proteins. They will look exactly like viruses but willnot be infectious.

"We believe it (viral engineering technology) might be a potentvaccine strategy for herpes and other viruses," Kingsman said.

The agreement is BBL's second with Oxford University. Thefirst, a four-year agreement due to end soon, focused onaspects of HIV molecular biology and resulted in thedevelopment of p24-VLP, an AIDS treatment vaccine in humanclinicals based on BBL's virus-like particles (VLP) technology,similar to its VDP technology.

BBL is pursuing research and development in inflammation andinflammatory diseases, including asthma, arthritis and cancer,and in the immunotherapy of viral diseases, particularly AIDS.

The company's stock dropped $1.88 a share on Monday to$16.50.

-- Michelle Slade Associate Editor

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