SciClone Pharmaceuticals Inc. announced Thursday theformation of SciClone Japan K.K., a wholly owned subsidiary, todevelop and market drugs for treating cancer, infectiousdiseases and immune system disorders.

The San Mateo, Calif., company (NASDAQ:SCLN) said its initialfocus would be to expedite clinical development of its hepatitisB treatment, thymosin alpha 1, in Japan. Trials are set to beginthe first quarter of 1993. Thymosin alpha 1 is currently inPhase III trials in the U.S. to treat chronic hepatitis B, a virusthat causes cirrhosis of the liver and liver cancer.

"There's an enormous market in Japan," said Thomas Moore,chairman and chief executive of SciClone. He said about 2.5million people in Japan have hepatitis B, twice the number ofcases in the U.S. He said 45 people in Japan die every day fromhepatitis B compared with 14 a day in the U.S. "It is thesecond-leading cause of death in Japan next to lung cancerfrom smoking, and the leading cause of death in Asia," Mooresaid. He said the Japanese market could exceed $500 millionannually and that the drug could be on the market there by1996. The company has invested $500,000 in the subsidiaryand is looking to form a partnership with a Japanese companyto raise more capital.

SciClone has already pursued other markets in Asia andexpects to market thymosin alpha 1 in Taiwan by 1994. Mooresaid trials are to start in Taiwan in about two months. Inaddition to Taiwan and Japan, SciClone expects to market thedrug in seven other Asian countries and Hong Kong by late1993 or early 1994.

In December 1991, SciClone entered into a joint 50-50agreement with Singapore Bio-Innovations Partners Ltd., whichconsists of a Singapore venture capital group and the Singaporegovernment, to market the drug in Malaysia, China, Indonesia,Hong Kong, Burma, Brunei, Thailand and Singapore. Moore saidthe seven countries and Hong Kong, along with Taiwan, couldhave a market that would reach $300 million annually. He saidSciClone will split profits 55 percent to 45 percent with theSingapore Partners for the first 10 years the product is on themarket. Thereafter, they will split profits 50-50.

Although there is a vaccine for hepatitis B, Moore said thethymosin alpha 1 therapeutic will be needed for as many asthree generations. "The vaccine has only been around since1984, and only in widespread use since 1986," he said. "Thereare a lot of people infected with the disease, and they arespreading it."

Moore also said that because the vaccine must be administeredthree times at six-month intervals before it is effective, aperson could be infected with the disease even afterinoculation has begun.

Thymosine alpha 1 works in part by influencingimmunoregulatory T-cell function and promotes the productionof cytokines such as alpha interferon, gama interferon andinterleukin-2 by activated lymphocytes.

-- Steve Payne BioWorld Staff

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