Subject: Merck, Repligen Race To Develop and Market AIDS Vaccine
Date: Published: 5/28/87 98 lines
Source:  WALL STREET JOURNAL. Copyright Dow Jones & Co. Inc. 

   Merck, Repligen Joining Forces in Race
   To Develop and Market AIDS Vaccine
    ---
   By James Stewart
   Staff Reporter of The Wall Street Journal

   Merck & Co. and Repligen Corp. joined forces in the race
to develop and market an AIDS vaccine.
   Under agreements between the two companies, they will
combine their vaccine research and development efforts on
AIDS, or acquired immune deficiency syndrome.  The agreements
unite Merck's marketing muscle, financial resources and
research capabilities and Repligen's gene-splicing
technology.
   Merck, based in Rahway, N. J., will have world-wide rights
 to the AIDS vaccine technology and any finished vaccine.  In
return, Repligen, in Cambridge, Mass., will receive payments
from Merck, including $7.5 million in the first year, of
unspecified sums in future years, financial support for
 further research and development, and royalties on any AIDS
vaccine marketed by Merck.
   A Merck spokeswoman declined to estimate total payments to
Repligen, saying that the amount depends on achieving various
steps in the vaccine's development.  A Repligen spokesman
characterized the payments as "substantial."
   The companies warned that development of a successful
vaccine isn't certain, but investors reacted favorably to the
announcement.
   Merck's shares closed yesterday at $154.50, up $2, in
composite trading on the New York Stock Exchange.  Repligen's
shares closed at $24.25, up $2.25, in national
over-the-counter trading.
    For Merck, one of the world's largest pharmaceutical
companies, the agreements represent its first major entry
into AIDS vaccine research.  About a half-dozen AIDS vaccines
are known to be in development, and Bristol-Myers Co. has
said it expects to seek Food and Drug Administration approval
for human clinical tests of its AIDS vaccine.
   Repligen's development of an AIDS vaccine already is well
under way, and the company reiterated that it expects to seek
FDA clearance for clinical tests on humans of its AIDS
vaccine by midsummer.
   The agreement bolsters Repligen's access to capital and
heightens its credibility as a fledgling biotechnology
concern.  Equally important, the provision for future
royalties positions the company to profit even if its own
technology doesn't result in a successful AIDS vaccine.
   The Repligen AIDS vaccine, on which Merck now will
collaborate, is based on genetically engineered protein
fragments of the AIDS virus surface coating.  Repligen said
its scientists, who developed an experimental vaccine with
scientists from Centocor Inc., the National Institutes of
Health and Duke University, have published results of
 experiments that provide "strong evidence" that such a
vaccine neutralizes the AIDS virus in animals.
   Merck and Repligen spokesmen both cautioned that the tests
are at an early stage and that it isn't known whether the
vaccine will be effective in humans.
   Thomas H. Fraser, Repligen's executive vice president,
said Repligen agreed to join Merck because it needs Merck's
"marketing clout" and because "Merck's R&D in vaccine
development is among the best in the world."  Merck currently
is marketing the world's first vaccine derived from
 gene-splicing technology, Recombizax HB, an anti-hepatitis B
vaccine.
   Dr. Fraser said testing an AIDS vaccine poses unusual
hurdles for researchers, since the virus is known to produce
AIDS only in humans.  Repligen is conducting tests of the
virus on chimpanzees, but chimpanzees exposed to the virus
develop flu-like symptoms rather than the fatal AIDS. Dr. 
Fraser said Repligen and Merck scientists will work closely
with NIH and Duke scientists led by Dani Bolognesi.
   At its annual meeting in April, Merck said it had
organized its first AIDS research program.  The Merck
spokeswoman said that program, which is focused on the
development of an anti-viral chemotherapy treatment for AIDS,
rather than on an AIDS vaccine, will continue and won't be
directly affected by the agreements with Repligen.  She said
Merck has been closely following AIDS vaccine research for
some time and sought the agreements with Repligen because
"it's a very promising approach."
   In April, Repligen purchased all marketing rights it
didn't already own for the AIDS vaccine from Malvern,
Pa.-based Centocor, which helped Repligen develop the
vaccine, for 1.2 million shares, or 17% of Repligen's stock,
and $2.9 million.
   For the nine months to Dec. 31, Repligen had a net loss of
$3.1 million on revenue of $3.6 million.

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