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SMITHKLINE BEECHAM/HGS GENE SEQUENCING COLLABORATION

Executive Summary

SMITHKLINE BEECHAM/HGS GENE SEQUENCING COLLABORATION gives SB exclusive worldwide rights to "therapeutic, vaccine and diagnostic products and services" developed in collaboration with Human Genome Sciences, the companies said May 20. The agreement also includes "applications for development of body imaging products, devices and biosensor technology, plus applications for computing and animal health," the announcement states. HGS will retain "rights to the use of genetic data for applications in gene therapy and the design of antisense agents." The agreement is understood to call for payments from SmithKline Beecham of up to $100 mil., including an equity investment by SB in HGS. Rockville, Md.-based HGS was established in July to commercialize discoveries made by the Institute for Genomic Research (TIGR) and its chief researcher, former National Institute for Neurological Disorders and Stroke section chief Craig Venter, PhD ("The Pink Sheet" July 13, 1992, p. 14). Both HGS and TIGR were formed by the venture capital group Healthcare Investment Corp., whose president is former Smith Kline & French Labs U.S. President James Cavanaugh. "The goal of this alliance is to convert genomic data into pioneer drugs and diagnostic products and services," SB said. The company highlighted the potential for the research to result in "increasingly accurate molecular tests for the early detection of disease, including the identification of people at risk even before disease has begun." HGS will receive royalties on sales of any resulting products and "will be able to co-promote certain products," the companies said. "In addition, HGS can develop certain human and animal health product opportunities which SB elects not to pursue." "SB and HGS recognize the commercial and humanitarian importance of the scientific data emerging from this collaboration, and the intent is to maximize its potential as rapidly as possible," the companies said. "Data outside SB or HGS' areas of interest will be made available to third parties on a fair and equitable basis." Several firms are working to commercialize products based on automated gene sequencing technology. Pfizer, for example, has publicized its in-house gene sequencing program in presentations to financial analysts and shareholders ("The Pink Sheet" April 26, p. 13). Venter's automated gene sequencing program at NINDS generated data cited in patent applications filed by the National Institutes of Health for genetic fragments with unknown function. Those patent applications have not been allowed by the Patent & Trademark Office. In December, Venter told an NIH subcommittee that HGS "will not file patents on [expressed sequence tags] without biological function" but will file for genes and proteins "of interest to them that they are doing follow-up research on." HGS appointed Dana Farber researcher William Haseltine, PhD, as its chairman and CEO on May 12. Haseltine previously had served as chairman of the company's scientific advisory board.

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