Genetic Therapy Inc. on Monday announced a series ofcollaborative agreements with Sandoz Pharma Ltd. to developand commercialize gene transfer technology in the areas ofimmunology/inflammation, cancer and cardiovascular disease.

The companies will develop products based on GTI's genetherapy system to deliver genes into target cells using viralvectors. The ultimate goal is in vivo therapy, or theintroduction of genes directly into the body to be incorporatedinto target cells.

In the short term, it's likely that gene therapy will beperformed ex vivo through the insertion of genes into cells thathave been removed from the body and then are reinfused.

Under the agreement -- GTI's first corporate partnership --Sandoz purchased for $10 million 470,357 newly issued sharesof GTI common stock priced at $21.26 per share. Sandoz holds6.1 percent of GTI's 7.7 million shares outstanding.

GTI shares (NASDAQ:GTII) rose 88 cents on Monday, closing at$13.88.

Sandoz also will provide up to a total of $13.5 million overthree years to fund up to three projects in at least two of thedisease areas included in the agreement. GTI is required duringthe first year to contribute up to $1 million in additionalfunding per project.

In addition, Sandoz will make milestone payments of up to$11.5 million per product resulting from the projects.

Sandoz will receive worldwide manufacturing and marketingrights for technology developed in the disease areas includedunder the agreement in exchange for royalty payments to GTI.Sandoz also has the right to nominate one person to GTI'sboard.

GTI of Gaithersburg, Md., will itself develop and marketproducts for genetic diseases and other areas not specified inthe agreement.

-- Karen Bernstein BioWorld Staff

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