Applied Microbiology Inc. said Tuesday it has entered into atechnology licensing agreement with Beiersdorf GmbH ofHamburg, Germany, to manufacture and sell an underarmdeodorant derived from bacteria.

The deodorant was developed by Beiersdorf using Applied'sAmbicin-N anti-microbial peptide.

Applied, located in New York, plans to sublicense thetechnology to U.S. consumer products companies formanufacture and sale. Applied estimates the annual U.S. marketfor deodorants at $1.7 billion.

Applied stock (NASDAQ:APLY) closed at $4.25 on Tuesday, up 25cents.

Applied has agreements with several other companies todevelop Ambicin, which is derived from natural sources. CalgonVestal Laboratories, a subsidiary of Merck & Co., has licensedAmbicin to develop skin care products. Babson Brothers plansto begin on July 1 marketing Ambicin as an external dip tofight bovine mastitis. Ciba-Geigy AG is developing Ambicin asa therapeutic infusion against bovine mastitis.

Applied and Pfizer Inc. last week ended their agreement todevelop Ambicin as a plaque-fighting product, and Applied islooking for a new partner. -- KB

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