Cambridge Biotech Corp. announced Monday that it licensed itsQS-21 Stimulon adjuvant to SmithKline Beecham plc for use inas many as 25 vaccines. It expects to sign a similar deal withGenentech Inc. for the adjuvant's use with an AIDS vaccine.

CBC of Worcester, Mass., declined to disclose specific terms ofthe agreements. A CBC spokesman said that the financialimpact would be significant to the company.

CBC, which has been profitable in its past three quarters, isalso to receive from SmithKline of Philadelphia milestonepayments, bulk orders as its exclusive adjuvant supplier, andundisclosed royalties on sales of vaccines using the adjuvant.

"The ability to target specific immune responses is animportant aspect of our work," said Jan Leschly, SmithKline'schairman. QS-21 "will complement our new vaccinedevelopment program for several viral hepatitis diseases,Lyme disease, herpes and influenza."

Other disease targets were not disclosed. On some, such asLyme disease and HIV, CBC retained rights to pursue its owndevelopment or to seek a second licensee. In other cases,SmithKline received exclusive rights. CBC is exploring thelicensing of the adjuvant for use in cancer treatments andagainst infectious diseases not already covered, said FrederickCasselman, CBC's vice president of legal and regulatoryaffairs.

CBC said it expects next week to sign a definitive agreementwith Genentech of South San Francisco, Calif. Genentech is tofund further product development, clinical trials andmarketing costs of its vaccine using the adjuvant. CBC is toreceive milestone payments as the vaccine progresses inclinical trials, plus bulk sales from an exclusive supplyagreement and royalties on product sales.

Genentech and SmithKline both previously sublicensed fromCBC rights to the gp120 envelope protein to the AIDS virus foruse in recombinant vaccines. CBC in 1988 exclusively licensedthe patent (4,725,669) to gp120 from Harvard University.

With the potential of collecting two royalties on Genentech'sHIV vaccine, "we hope they are very successful," Casselmansaid. CBC is continuing work on its own AIDS vaccine.

CBC's stock (NASDAQ:CBCX) closed Monday at $7.75 a share, up25 cents. Genentech (NYSE:GNE) closed at $33.88, down 37cents.

The adjuvant has been shown in animal studies to elicit a cell-mediated immunity -- the production of CD4 and CD8 cytotoxiccells -- when used with soluble subunit DNA vaccines. Theadjuvant is part of a clinical study started last spring atSloan-Kettering Memorial Cancer Center in New York of animmunotherapy against malignant melanoma.

Preliminary data from that study gave CBC reason to proceedwith licensing the adjuvant, Casselman said. The study's finalresults are now being analyzed.

The adjuvant was developed from saponin compounds derivedfrom the South American soapbark tree, Quillaja saponaria.CBC's interest in QS-21 stems from its work on a veterinaryvaccine against feline leukemia, which was launched byPitman-Moore Inc. two years ago. CBC was issued a U.S. patentcovering the adjuvant in 1991.

Vaccine makers are looking to improve existing vaccines, andmany new vaccines are in development, Casselman said. "Froma marketing standpoint, this is where to be."

-- Ray Potter Senior Editor

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