Vestar Inc. and Vical Inc. announced Monday that Vestar haspurchased exclusive worldwide rights to Vical's lipid "prodrug"technology for orally administered compounds to treat cancer,AIDS and systemic infections.

The agreement includes signing fees, milestone payments androyalties. The deal could be worth about $10 million to Vical,depending on the market size for the drugs that are developed,said Michael Hart, Vestar's chief financial officer. No otherterms were disclosed.

Vestar shares (NASDAQ:VSTR) gained 38 cents to $13.88 onMonday.

San Diego-based Vical's technology combines a lipid with apharmaceutical compound so that it can be delivered orally.Prodrugs are generally inactive until slow metabolization insidethe body releases the therapeutic portion of the compound.Since prodrugs are new chemical entities, they can be patented.

The agreement adds an oral delivery capability to Vestar'sliposome technology, which delivers drugs via injection.

As part of the transaction, Vestar has also acquired rights todevelop a group of injectable lipid prodrugs with anti-viralactivity against cytomegalovirus. The virus occurs in as manyas 30 percent of AIDS patients. San Dimas, Calif.-based Vestarexpects to develop this technology more rapidly than the oralprodrug technology, Hart said.

For privately held Vical, the deal is the first of what it hopeswill be a series of transactions to put the oral lipid technologyinto the hands of others and allow it to focus on its core genetherapy business, said Robert Zaugg, senior director of businessdevelopment. "We're still seeking a buyer for the technology,who would then acquire the rights to this deal. Or we could doother licensing deals or spin out the lipid business into anothercompany."

Vical retains rights to a different lipid technology, cationiclipids, for use in gene therapy. It licensed rights to thattechnology for use in antisense applications to IsisPharmaceuticals Inc. in March.

Vical hopes to enter the clinic by early 1993 with either anHIV immunotherapeutic vaccine or another gene-based drug,Zaugg said. -- Karen Bernstein

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