Subject: SmithKline to Enter Pact for Manufacturing AIDS Drug 
Date: Published: 9/6/88 76 lines
Source:  Wall Street Journal.  Copyright Dow Jones & Co. Inc. 

    SmithKline to Buy 9.6% Invitron Stake
    In Pact for Manufacturing AIDS Drug
    ----  
    By Frank E. James
    Staff Reporter of The Wall Street Journal

    SmithKline Beckman Corp. said it agreed to pay $15 million
 to buy at least 9.6% of Invitron Corp. 's common shares.
 Invitron in turn will manufacture SmithKline's version of a
 bioengineered drug that is being hotly pursued as a potential
 therapy against acquired immune deficiency syndrome.
    Philadelphia-based SmithKline said it reached a
 preliminary agreement with Invitron whereby the St. Louis
 company will make soluble T4.  Soluble T4 is SmithKline's
 designation for a compound known generically as CD4, a
 protein that researchers hope will block or impede the
 progress of the AIDS virus in an infected individual.
    Martin Rosenberg, SmithKline's vice president of
 biopharmaceutical research and development, said Invitron, a
 small biotech firm, was chosen to produce soluble T4 for
 SmithKline because "they had the manufacturing capacity in
 these kind of mammalian cells.  They had the scale."
    SmithKline, like other major pharmaceutical companies,
 lacks the in-house expertise to make the more complicated
 molecules through recombinant DNA methods.  So it had to turn
 to a smaller concern specializing in such work.  SmithKline
 plans to have a pilot bioengineering plant up and running
 next year, said Mr. Rosenberg.
    But SmithKline needs to produce reliable and large amounts
 of the protein sooner than next year if it is to begin
 clinical trials late this year or in early 1989 as scheduled.
 Genentech Inc., of South San Francisco, Calif., has already
 begun clinically testing a CD4 product in humans.  Other
 competing groups, including Biogen Inc. of Cambridge, Mass.,
 and the Dana-Farber Cancer Institute, are attempting to
 develop CD4 as well.
    Invitron is able to get relatively higher yields from
 gene-spliced mammalian cells than other biotech concerns
 because it has perfected a process called continuous
 perfusion, which allows it to grow more cells for each
 processing chamber.  Invitron's patented process allows that
 larger number of bioengineered cells to produce more
 substances at relatively low operating costs.  Its product is
 also purer than that produced by other methods of cell
 culturing, such as the batch technique.
    The CD4 protein is found in high levels on the surface of
 T-4 cells, the white blood cells that trigger the immune
 system's disease-fighting response.  The T-4 cells are
 infected and destroyed by the AIDS virus, resulting in the
 collapse of the immune system.
    Researchers hope that if the body is flooded with
 synthetic CD4 through intravenous infusion, the AIDS virus
 could be tricked into binding with the impostors, rendering
 the virus harmless to healthy cells.
    As part of the SmithKline agreement with Invitron,
 SmithKline would buy about 1.5 million Invitron shares and
 warrants to buy about 217,000 shares at $10.35 a share.  If
 the warrants were exercised, SmithKline's investment in
 Invitron could go as high as 10.9%.
    In national over-the-counter trading Friday, Invitron
 closed at $7.25, down 50 cents.
    The companies said the agreement also gives SmithKline
 rights to Invitron's proprietary technology in exchange for
 an undisclosed cash payment and additional license payments
 as well as manufacturing revenue guarantees or royalty
 considerations.  The transaction thus has a value of about $21
 million.

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