Genetics Institute Inc. (GI) and Genetic Therapy Inc. (GTI)announced Thursday an agreement to develop andcommercialize Factor VIII and Factor IX gene therapy productsusing GTI's viral vector systems for the treatment ofhemophilia.

In essentially a technology-and-rights-exchange agreement, GIswapped its patented gene for Factor VIII with GTI forexclusive marketing rights for factor VIII and IX gene therapyproducts resulting from the collaboration outside NorthAmerica. GTI received exclusive rights for Factor IX technologyin viral and retroviral vectors to treat hemophilia B fromBritish Technology Group USA Inc. in January.

Under the agreement with GI of Cambridge, Mass., GTI willhave exclusive rights to market factor VIII and IX genetherapy products in North America. Marc Schneebaum, vicepresident and chief financial officer of GTI of Gaithersburg, Md.,would not disclose further commercial details of the deal, butsaid there would be no up-front payments.

Factors VIII and IX are proteins essential to normal clottingthat are missing or defective in patients with hemophilia A andhemophilia B. Current treatments for hemophilia use productsderived from donated blood, which has the potential risk ofinfection.

"Products for hemophilia made by recombinant techniques arevirtually free of complications," said Melinda Lindquist,spokeswoman for GI. The company expects U.S. marketingapproval for its Factor IV protein product, Recombinate, by theend of the year for treatment of hemophilia A.

According to Lindquist, gene therapy, a drug delivery systemfor introducing genes into target cells, will be used to discovertherapeutics for hemophilia.

GTI develops delivery systems for gene therapy in the form ofagents called retroviral vectors, used to insert genes into cells.Modified viruses, called viral vectors, take advantage of thenatural ability of many viruses to insert their own geneticmaterial into the genome of the host cell. Once inserted intocells, modified viral vectors cannot then reproduce and infectother cells. Retroviruses are useful as vectors for gene transfer.

According to Lindquist, the current market for blood-derivedproducts used for hemophilia is about $750 million worldwide,but she said the market could change if a treatment for thedisease is developed.

Neither Lindquist nor Schneebaum would predict when theyexpect a gene therapy-based product for hemophilia to enterclinical trials or reach the market.

Genetics Institute discovers and develops humanpharmaceuticals through recombinant DNA and othertechnologies for serious bone fractures, cancer, chemotherapyside effects and infectious diseases. GI units (NASDAQ:GENIZ)were down 25 cents a share on Thursday to $28.50.

Genetic Therapy develops human gene therapy products fortreating genetic and acquired diseases.

GTI stock (NASDAQ:GTII) rose $1.13 on Thursday to $8.38.

-- Michelle Slade Associate Editor

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

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