Viagene Inc. today announced it will receive up to $40 million todevelop its HIV immunotherapeutic drug under an agreement signed withThe Green Cross Corp. of Japan.

Green Cross, based in Osaka, will receive an exclusive worldwidemarketing license to the drug. In exchange, it will fund research anddevelopment and clinical trials, and make milestone payments over afour-year period. The funding will include a $4.75 million equityinvestment in Viagene.

Viagene, based in San Diego, will retain manufacturing rights andreceive a royalty on sales.

The drug is designed to destroy HIV-infected cells by stimulatingthe body's immune system killer T cells.

Viagene uses a genetically engineered non-human virus, the murineretrovirus, to deliver genes from the HIV virus into human cells.The genes cause the cells to produce one or more HIV-1 proteins thatstimulate the immune system to produce cytotoxic T-lymphocytes(killer T cells).

Viagene's strategy differs from that of other companies developingAIDS therapeutics. Viagene's drug causes the body's cells to producetherapeutically important HIV proteins; other companies are introducingthe proteins from outside of the cell.

The company hopes to begin Phase I clinical trials in 1992 in patientsinfected with HIV.

The size of the AIDS therapeutics market has stimulated intensecompetition to develop products. The Centers for Disease Control inAtlanta estimates that 1 million Americans are infected with HIV. TheU.S. market for HIV treatments is expected to exceed $1 billion by 1993.

Companies developing therapeutic vaccines include Immunization ProductsInc. of San Diego, a joint venture between Immune Response Corp. andRorer Group Inc.; Biocine Co., a joint venture between Chiron Corp.and Ciba-Geigy Ltd.; Genentech Inc.; and Viral Technologies Inc.

Viagene is also negotiating a round of venture financing, which doesn'tinclude Green Cross, that is expected to close within 30 days, saidRobert Abbott, president and chief executive officer of Viagene. Ifthat round is completed, Green Cross will have a 16 percent equity stakein Viagene. Otherwise, Green Cross' stake in Viagene will be 18 percent.

-- Karen Bernstein BioWorld Staff

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