2 Md. biotech companies announce collaboration


Two leading Maryland biotechnology companies announced yesterday that they would collaborate on human gene therapies and licensing agreements in an arrangement analysts said could speed the way to product development.

The pact unites a company that discovers genes, Human Genome Sciences Inc. of Rockville, and a company in the business of developing gene products to treat diseases such as cancer, Genetic Therapy Inc. of Gaithersburg.

Under the terms of the agreement, the companies will try together to identify and develop products using Human Genome's gene discovery research and Genetic Therapy's therapy technology. The companies said that they will offer pharmaceutical companies rights to develop gene therapy products based on their combined technology and research, and that they have agreed not to collaborate with others in the same business.

Although relatively young companies, Human Genome and Genetic Therapy are leaders in their respective fields. Genetic Therapy, founded in 1986, currently is testing genetic therapies in clinical trials for diseases such as cystic fibrosis, AIDS and cancer. It is believed closest to commercializing the technology to treat diseases by inserting genes into a patient's cells. The company reported a $3.1 million profit in its second quarter, but said that was primarily due to a one-time payment.

Genetic Therapy's chairman and chief executive officer, M. James Barrett, said the collaboration announced yesterday "offers a range of product development opportunities that neither of us had separately." This is because third parties now will have access to Genetic Therapy's extensive gene delivery technology and human clinical experience, as well as to Human Genome's gene discovery capabilities, he said.

William A. Haseltine, chairman and chief executive officer of the 2-year-old Human Genome, said the agreement allows his company to use "our newly discovered genes in human gene therapy, opening up a new and exciting field for HGS."

The company reported a $1.8 million profit last year and a $7.5 million profit in the first half of this year.

Mary Ann Gray, an analyst with Kidder, Peabody in New York, said the collaboration could be critical to moving products to market.

Initially there was great interest in companies like HGS that discover genes, Ms. Gray said, "But the problem I had with them was that while it is exciting to discover new genes and find applications for them, ultimately the name of the game in this business is getting products on the market." Genetic Therapy's asset in the arrangement, she said, is knowledge of developing genes and getting them to market.

Genetic Therapy stock closed yesterday at $9.75, up 75 cents in trading on Nasdaq. Human Genome stock closed up $1 at $16.50.

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