Alza Corp. disclosed on Thursday initial results from Phase IItests of a controlled-release treatment for oral fungusinfections.

The targeted infection, oral candidiasis, is commonly seen inAIDS and also affects the elderly and cancer patients, as well asimmune compromised individuals.

The tablet developed by the Palo Alto, Calif., company uses thecompany's mucosal oral therapeutic system (MOTS). The non-dissolving lozenge stays in the mouth to deliver the anti-fungaldrug nystatin over three hours. Quick-dissolving nystatinlozenges and mouthwashes are available to treat the infection.However, the company told the Merrill Lynch Health CareConference on Thursday that its device outperformed acomparable dose of quick-dissolving nystatin.

The company plans to grant certain marketing rights for theproduct to other companies.

Alza CEO Martin Gerstel also announced at the conference thathe would resign from his post sometime in 1994 after 24 yearsat the company to devote more time to outside interests.

In a separate announcement, Alza and Bio-Electro Systems Inc.said that BES stockholders on Thursday approved a previouslyannounced merger. Each BES stockholder of record as of theclose of business today will receive 0.5772 shares of Alzacommon stock (AMEX:AZA) for each share of BES.

BES was formed in 1988 through a rights offering to Alzashareholders to develop drug delivery systems usingelectrotransport and bioerodible polymer drug deliverytechnologies.

Alza shares lost 88 cents to $49. -- Roberta Friedman, Ph.D.

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