The experiment was so elementary, and the results so surprising, that researchers working with San Diego’s Vical Inc. couldn’t really believe what they were seeing. It all seemed too simple.

They had been injecting submicroscopic fatty globules containing DNA or RNA into mice to see what would happen. The idea was that the fat globules, called liposomes, would be taken up by cells. The cells would use the genetic material inside to make proteins they couldn’t otherwise make.

The researchers found moderate success with that, but the rigors of science demanded that the experiment have a “control” portion--injecting the raw DNA or RNA into the mice to show that the liposomes themselves were making it possible for the new genes to be incorporated into the cell’s processes.

It turned out the cells like the raw material even better and began making the new proteins for as long as six months.

“This was a big surprise, and that’s really what you’re looking for in this area,” said [Dr. Philip Louis Felgner (born 1950)], director of product development at Vical. Felgner worked on the experiment with [Dr. Jon Asher Wolff (born 1956)] and others at the University of Wisconsin at Madison.

Researchers spent several months longer trying to find flaws in their methods or their conclusions. The literature of science is littered with examples of experimental results that deserved the label of too good to be true, explained [Dr. Karl Yoder Hostetler (born 1939)], vice president for research and development at Vical.

“We didn’t want any fiascoes,” he said.

Vical hopes that the results of this checking and double-checking, reported in today’s issue of the journal Science, will convert the company from a bare-bones start-up to a major player in the ranks of San Diego’s biotechnology community.

The company, which was founded in 1987, hopes to find financing to more than double its scientific staff of 22 as a result of the study. It is talking with several large drug companies to see if any would like to buy into the follow-up studies on the new gene transfer method, said Vical President Wick Goodspeed.

Some familiar names in San Diego science and business have played a role in Vical. Among them:

[Dr. Karl Yoder Hostetler (born 1939)], who is on leave from his longtime post as professor of medicine in residence at UC San Diego. His specialties include investigating ways to use lipid chemistry to improve the effectiveness of drugs.

[Dr. Douglas Daniel Richman (born 1943)], a founder and scientific adviser to the firm. Richman is a professor in residence of medicine and pathology at UCSD, specializing in virology and clinical trials of AIDS treatments.

[Dr. Dennis A. Carson (born 1936) ], also a scientific adviser to the firm. Carson recently resigned as head of the division of clinical immunology at Scripps Clinic to become head of UCSD’s new institute for research on aging.

Timothy Wollaeger, chairman of the board. Wollaeger formerly was senior vice president in charge of finance and administration for Hybritech Inc., the monoclonal antibody firm whose success was capped in 1986 with its $485-million acquisition by Eli Lilly & Co.

Howard E. (Ted) Greene, a director of Vical. He formerly was chief executive officer for Hybritech. Greene and Wollaeger were the driving forces behind Biovest Partners, a venture capital firm that financed several San Diego biotech firms.

W. Larry Respess, a Vical director. A leader in biotech patent law, he formerly was general counsel of Gen-Probe and Hybritech.

Until now, the best combination of science and business for Vical has been the multi-year research contract it received last summer from Burroughs Wellcome Co. to develop new forms of AZT for AIDS therapy. The study is investigating the idea that encasing AZT in fat globules would make it more powerful within the body.

The gene-insertion technique reported in Science this week is being suggested as a way to cause the body to generate proteins that would block persistent viral infections, ranging from AIDS to herpes. It also is seen as having potential use as a way to trigger cells to immunize the body against diseases, researchers say.

Vical is calling the new method “gene therapeutics,” to distinguish it from the traditional goal of gene therapy, which uses viruses to insert missing genes into the genetic codes of people with genetic diseases.

The so-called retroviral method has proved difficult and slow, despite several years of intense effort by research groups around the country, including a group led by Dr. Theodore Friedmann at UCSD.

Because retroviruses insert their own genetic code into the cells of their host, the method is also expected to be problematic as a gene therapy technique--since some scientists worry that this could harm the patient irreversibly in some unforeseen way.

Inserting the genes themselves into muscle cells--without any retroviral carrier--avoids this stumbling block entirely, [Dr. Philip Louis Felgner (born 1950)] said. The genes do their work of producing proteins, called expression, but they don’t seem to affect the cell’s own genetic structure, he said.

“People have worked in the gene therapy area for years assuming that a rather complex viral delivery system would be required in order to get expression. And we have found that you can do it very simply,” Felgner said.

It was the slowness of the gene therapy field that led Felgner’s collaborator,  of the University of Wisconsin, to decide less than two years ago to get out of it altogether, Wolff said in a telephone interview.

Wolff was an assistant professor and a researcher in Friedmann’s UCSD lab before going to Wisconsin as an assistant professor of pediatrics and medical genetics in 1988.

“I had pretty much planned to get out of the gene therapy field because I got discouraged with the retroviral approach. Scientifically, it wasn’t very challenging,” he said. “Everybody was doing the same thing, and nothing was working that well.”

The results of the research contract with Vical, begun in January, 1989, have rekindled his enthusiasm, [Dr. Jon Asher Wolff (born 1956)] said.

He believes that, in the end, genetic therapies will involve a variety of techniques, not just the Vical method. But he and [Dr. Philip Louis Felgner (born 1950)] acknowledge that they expect some resistance to their ideas from the traditional gene therapy community.

“You’re talking about somebody who has spent his life in this field, and who would like to make the real breakthroughs that are going to allow it to be used in patients with diseases,” Felgner said. “There’s quite a bit at stake.”

Other collaborators with Wolff and Felgner on the research were [Dr. Robert Wallace Malone (born 1959)] of Vical and Phillip Williams, Wang Chong, Gyula Acsadi and Agnes Jani in Wisconsin.

Vical is planning to try to patent the technique, even though it involves no novel or complex steps unfamiliar to molecular biologists. In essence, it involves preparing DNA or RNA with standard techniques and then injecting it in the conventional way into muscle.

“The reason why we have patent position is that it was such a total surprise. Some of those things are the best patents you can get,” Felgner said. “Nobody who was ‘skilled in the art’ would have ever thought that what we have accomplished here was even possible. Nobody would have even thought to do the experiment.”

A Federal review panel has cleared the way for the first commercial test of gene therapy, a potentially revolutionary technique that could cure hereditary diseases and might also help in fighting diseases like AIDS and cancer.

The Recombinant Advisory Committee of the National Institutes of Health, which oversees gene therapy experiments, on Tuesday gave permission to researchers associated with the Targeted Genetics Corporation of Seattle to implant genetically modified cells into patients with AIDS in hopes of helping them fight the disease. The test had already been approved by the Food and Drug Administration. Marking a Milestone

Targeted Genetics, which is a subsidiary of the Immunex Corporation, a biotechnology company, said it would be the first clinical trial of gene therapy to be run by a company. The test would mark a milestone on the way to commercialization, which could come in the second half of this decade.

There have been several previous tests of gene therapy, but they have been run by individual physicians, such as those associated with the National Institutes of Health. Another company, [Genetic Therapy Inc.], while not having organized its own clinical trials, has been collaborating with and supplying materials to most of these researchers, such as [Dr. William French Anderson (born 1936)] at the National Heart, Lung and Blood Institute.

Gene therapy involves implanting genes, which provide the hereditary instructions that control the body's features and functions, into patients. A hemophiliac, for instance lacks the ability to produce factors that cause the blood to clot. With gene therapy, such a patient could be given genes to allow him to produce the clotting factor, thereby doing away with the need for periodic injections.

"If you're really doing the right kind of job, one kind of gene therapy application would cure a patient for a lifetime," said K. Michael Forrest, president of Transkaryotic Therapies Inc., a gene therapy company in Cambridge, Mass.

Sickle cell anemia and cystic fibrosis are other hereditary diseases that gene therapy could potentially cure. Even for nonhereditary diseases, genes could be implanted to allow the body to make chemicals that would otherwise have to be given as drugs.

"This is a whole new way of delivering medicine," said John Archer, executive vice president of the Somatix Therapy Corporation, a gene therapy company in Alameda, Calif.

Gene therapy has attracted a host of start-up companies of which two -- Somatix and [Genetic Therapy Inc.], of Gaithersburg, Md., -- have already issued stock publicly. And some big drug companies, led by Sandoz Ltd. are also getting involved, in part by alliances with smaller companies. Others Plan Trials

Others will enter clinical trials this year as well. Viagene Inc., based in San Diego, plans to apply for permission to begin clinical trials on AIDS patients in March and Somatix hopes to begin testing the technique in cancer patients later this year. [Vical Incorporated], of San Diego, also plans to begin a trial on AIDS patients before the end of the year.

But despite its promise, gene therapy faces an inordinate number of safety, technical and marketing issues before it can become a successful treatment.

"It's one thing to treat individual patients," said Cynthia Robbins-Roth, editor of Bioventure View, a newsletter that follows biotechnology. "It's quite another to come up with a commercially successful product."

Ideally, for example, pharmaceutical companies would like to sell genes in a jar or a syringe, like any other drug, that could be injected into a patient.

But gene therapy as currently practiced is far more cumbersome. It involves removing skin cells, blood cells or other types of cells from a patient, growing those cells in a culture, putting genes into them and then putting the cells back into the body.

Such a complex procedure is not likely to be used except for serious diseases. Moreover, such a procedure makes gene therapy more of a service business than a traditional pharmaceutical business, perhaps requiring gene therapy companies to set up their own clinics.

Another looming business issue is the ownership of genes. Many of the companies working on gene therapy do not have patent rights to genetic sequences that could be useful in treatment, forcing them to license them from companies that do.

But perhaps a bigger obstacle is safety. As now generally practiced, viruses, which have the ability of inserting their own genetic material into target cells, are used as genetic delivery vehicles. The virus's own genetic material is removed and replaced by the therapeutic gene, like the gene to produce the blood clotting factor needed by hemophiliacs. The virus is also rendered incapable of reproducing and causing an infection.

There are two main risks with this. One stems from the fact that the virus inserts the new genetic material at random into the chromosomes of the target cell. There is a chance that the viral genes could land on top of a cancer-suppressing gene and inactivate it, or land on top of a cancer-causing gene and turn it on.

A second risk is that the viral delivery van could somehow become active again, or become contaminated with active viruses. Researchers say that both risks are extremely small.

Concerns were stirred in December when Dr. Arthur Nienhuis, chief of the clinical hematology branch at the National Heart, Lung and Blood Institute, reported that three of eight monkeys involved in a gene therapy experiment developed fast-growing cancers, apparently because of the virus used.

Dr. Nienhuis and other experts said that the disabled viruses were known in advance to be contaminated with viruses capable of replication. In human trials, testing is done to make sure the viruses cannot replicate themselves. Still, the results were disquieting because it had always been believed that the viruses used, while capable of infecting mice, would not cause disease in humans and other primates.

"The Achilles' heel of this gene therapy thing is the safety issue," said Richard Bock of Sutro & Company in Los Angeles, who thinks it will be hard for companies using the virus approach to win approval for their therapies. These companies are [Genetic Therapy Inc.], Somatix, Viagene and Targeted Genetics, which will be spun out into a separate company in which Immunex will retain a minority stake.

These companies point out that all medical treatments carry some risks and that they are confident safety problems can be overcome.

In the trial approved Tuesday for Targeted Genetics, doctors at the Fred Hutchinson Cancer Research Center in Seattle will remove white blood cells from patients with AIDS who have undergone bone marrow transplants. The cells, known as killer T cells, will be genetically altered, multiplied and put back in the body to attack the AIDS virus.

But the genetic alteration of the T cells will not make them better at fighting AIDS, although that is the ultimate goal. In the first trial the cells will be given a marker gene to allow them to be traced in the body. The implanted gene will also serve as a "suicide gene" that will make those cells susceptible to being killed by a common antibiotic. That way, if the implanted cells cause harm, they can be destroyed, said Dr. Philip Greenberg, who is the lead investigator.

Viagene also hopes to use genetic therapy to fight AIDS. If plans to genetically alter skin cells so that they produce a protein found on the outer coat of the AIDS virus. The skin cells, once introduced back in the body, would produce the AIDS virus protein and stimulate an immune response.

Somatix plans to begin clinical trials this year of a treatment for cancer. Cells from a patient's tumor would be genetically altered to produce certain immune-stimulating chemicals in hopes of stimulating a stronger immune attack on the cancer.

Other companies are working on gene therapies that do not involve viruses. But these are in an earlier stage of development.

Transkaryotic Therapies and Cell Genesys of Foster City, Calif. are developing nonviral ways of implanting genes into cells taken from the body. ,

Vical has found that genetic material can be injected directly into muscle cells, doing away both with viruses and with the need to remove cells and reimplant them.

Targetech Inc., based in Meriden, Conn., is developing a technique to allow genes to be injected and to find their way to a proper organ. The company hopes, for instance, to implant genes to make the liver more effective in cleaning cholesterol out of the bloodstream.

But injecting genes directly into the body could also pose risks because it might not be easy to control what the genes do. When cells are removed from the body to be genetically altered it is possible to study what happens to the cells first before putting them back.

• Correction: Feb. 21, 1992 :  An article about gene therapy in Business Day on Feb. 14 referred incorrectly to the relationships of the parties in a clinical trial of the technology approved last week by the Recombinant Advisory Committee of the National Institutes of Health. The trial will be run by the Fred Hutchinson Cancer Research Center in Seattle. The Targeted Genetics Corporation is providing financial support and collaborating with the center; the company received the approval from the Food and Drug Administration to test the genetic transfer mechanism used in the trial.

A NEW kind of vaccine, which uses direct injections of DNA particles instead of the whole virus to induce immunity, has proved effective in protecting mice against influenza A.

The new method delivers "naked" DNA directly into a cell, prompting the mice to manufacture foreign proteins and then antibodies against them, holding out promise for vaccination against other infectious diseases, scientists reported recently in the journal Science.

Immunization with DNA mimics an actual infection more closely than a traditional vaccine does. With a traditional vaccine, an artificial virus protein, or antigen, acts as a stimulus for antibody production. But with a DNA vaccine, the virus protein is made in the cell rather than in the laboratory.

As a result, the antigen in DNA immunization stimulates not only an antibody response, but also a response known as cellular immunity, in which the body manufactures so-called killer T cells to destroy infected cells.

Implications of Findings

"This technique has conceptually raised the field of vaccine research to another level," said Dr. Carole Heilman, chief of the respiratory diseases branch at the National Institute of Allergy and Infectious Diseases in Bethesda, Md. "The implications are much broader than for influenza vaccine. In theory, this technique should work for just about any infectious pathogen."

It could also pave the way for a new kind of treatment for genetic disease, autoimmune disease and cancer, scientists said. But they stressed that human application was still several years away.

"What we've been trying to do with many vaccine formulations is to present antigen so it looks like it's coming from the inside out, rather than from the outside in," said Dr. Frederick Vogel, a microbiologist in the vaccine branch of the division of AIDS at the institute. "This is actually doing that."

But some scientists say the system's reliance on killer T cells is its weakness. "The cellular immune response is a transient response," said Dr. Brian Murphy of the institute. "Unless the virus establishes a persistent infection, the T cells disappear after about two weeks and have to be replicated from memory" after a subsequent infection. This reactivation takes two to five days, he said, by which time the virus could have taken hold.

Unlike other systems intended to deliver genes into cells, DNA immunization requires no packaging. This direct injection of pure DNA is cheaper and probably safer, since other delivery systems pose a small risk of causing infections because they use immobilized viruses as DNA carriers.

Another advantage of the new system is its stability, an important factor in distributing vaccines in third-world countries. "DNA is stable at room temperature," said [Dr. Jon Asher Wolff (born 1956)], director of biochemical genetics at the University of Wisconsin, a co-discoverer of the delivery technique described in Science. "So these vaccines probably wouldn't have to be refrigerated, the way vaccines containing viruses have to be."

An Accidental Discovery

Dr. Wolff traced the vaccine's development to a fluke discovery. "At first I thought my technician, Phil Williams, had made a mistake," he said. Dr. Wolff and his collaborators at Vical Inc., a San Diego biotechnology company, were using a fatty protein to package DNA for delivery into the muscle cells of mice. Proof of their success would be evidence that the cell was manufacturing the foreign protein coded for by the DNA.

As a control, they injected DNA without the protein into a comparison group of mice. But to their astonishment, the mice that received only DNA actually took up more DNA, and produced higher levels of the foreign protein, than the mice that received the DNA-plus-lipid package.

"It was so beautiful," said [Dr. Margaret Ann Liu (born 1956)], director of immunology at the Merck Research Laboratories in West Point, Pa., who later collaborated with the Vical scientists on the DNA flu vaccine. "People tried so hard with very complicated things to get DNA into cells. There was all this noise and thunder, and then in the quiet it turns out we have a very simple way of making this work."

At about the same time, scientists at other laboratories were independently making similar findings.

"When I first presented my work with what I called 'gene vaccines' in July 1992, the response was one of disbelief," said Dr. Harriet Robinson of the University of Massachusetts in Worcester, who experimented on chickens as well as mice, and inserted DNA directly into skin and mucosal cells. "The first question I was asked was, 'You don't think this will ever be useful, do you?' "

But by last September, at a scientific meeting in Cold Spring Harbor, L.I., the attitude toward gene vaccines had already changed. "All of a sudden it was working in too many laboratories to be ignored," Dr. Robinson said. "There was an appreciation that this was a very powerful, very promising, very exciting approach."

Use of DNA Gun

She and her collaborator, Dr. Joel Haynes of [Agracetus, Incorporated], in Middletown, Wis., have been delivering pure DNA into animals with a "DNA gun," which shoots gold beads coated with DNA from an influenza virus gene directly into skin cells.

The skin cells take in the DNA and make the influenza protein it directs them to make. The immune system responds with appropriate and effective antibodies and killer T cells.

Dr. Robinson said this technique induces immune protection with one one-thousandth of the flu DNA used in the Merck/Vical model.

"This system will be exceptionally useful for infections other than flu that we've never developed vaccines for," Dr. Robinson said. She said it held great promise for the control of viruses that cause measles, hepatitis and AIDS, as well as rotaviruses, which cause diarrhea in children.

Executive Summary : VICAL [, aka Vical Incorporated], ) PROPOSED IPO PROCEEDS ESTIMATED AT $17 MIL., at an assumed offering price of $9.25 per share, or roughly $19.6 mil. if the 300,000 share overallotment option is exercised fully. The San Diego-based gene therapy firm filed a revised registration statement with the Securities & Exchange Commission for a 2 mil. share initial public offering July 2. Underwriters are Hambrecht & Quist and Vector Securities. Vical has been seeking to go public since January. However, in the continuing difficult market for biotech stocks, the company has been forced to scale back its offering from the 3.45 mil. shares proposed earlier this year. Vical now expects to net roughly $10 mil. less than the $27.3 mil. it previously estimated ("The Pink Sheet" Jan. 18, p. 20). Vical plans to use "substantially all" of the net proceeds for research and development costs. The company expects proceeds plus existing cash to cover expenses through mid-1995, the IPO prospectus states. In April, Vical received a $1.25 mil. payment from Merck in exchange for the extension through 1994 of a licensing option on preventative vaccines for herpes simplex, hepatitis B and C, human papilloma virus and measles developed using Vical's technology. Merck and Vical entered into a collaboration in preventative vaccines in May 1991; Merck currently has rights to preventative vaccines developed for influenza and for HIV ("The Pink Sheet" June 17, 1991, In Brief). A gene-based cancer therapy being developed by [Dr. Gary Jan Nabel (born 1953)], University of Michigan in collaboration with Vical is currently in Phase I/II trials. The collaboration was formed in November 1992. The treatment, which employs a DNA/liposome complex encoding a histocompatability antigen (HLA-B7), was approved for a second trial by NIH's Recombinant DNA Drugs Advisory Committee at its June 7-8 meeting and now awaits FDA approval ("The Pink Sheet" June 14, p. 6). Vical plans to file an IND for an in-house Phase I/II study of the treatment. Two treatments that involve the intramuscular injection of genes encoding cytokines -- interleukin-2 and transforming growth factor-beta -- are currently in preclinical development under an agreement between Vical and Dennis Carson, MD, University of California-San Diego. Other areas Vical is pursuing using its direct gene targeting technology include therapeutic vaccines (targeted indications are AIDS, hepatitis B and herpes), the treatment of cardiovascular disease, specifically targeting ischemic heart disease with fibroblast growth factor-5, and the treatment of hemophilia A and B through the production of Factor VIII and Factor IX, respectively. Vical has fairly strong cash reserves in the event that the IPO is further delayed. As of March 31, the company had about $19.2 mil. in cash and cash equivalents. The biotech firm had $10 mil. at the end of 1992. Research and development costs rose to $4.4 mil. in 1992, compared to $3.6 mil. in in 1991. The firm has gained the bulk of its revenue so far this year from a sale of technology: Vical received net proceeds of $3.1 mil. in 1993, in addition to a payment of $1 mil. in 1992 from Vestar in an agreement that transferred rights to Vical's lipid prodrug technology to Vestar. 

These are busy days at Vical Inc., a small biotechnology company here. Using a second-generation approach to biotech drug development known as gene therapy, Vical is collaborating with industry giants like Merck & Company and Baxter International Inc. to develop everything from a vaccine for hepatitis to treatments for cancer, hemophilia and cystic fibrosis. Two of its cancer treatments recently produced encouraging results in clinical trials, and there has just been a breakthrough with a flu vaccine.

Across town, things are also hopping at Viagene Inc., one of the first gene therapy companies to attract a deep-pocket buyer. In April, the Chiron Corporation agreed to pay about $113 million for Viagene in a deal that amounted to a big vote of confidence in the company's quest for vaccines to combat cancer and viral diseases, including AIDS.

Gene therapy -- the revolutionary concept that disease can be treated with the body's own genetic material -- is alive and well, and not just in San Diego.

The 20 or so gene therapy companies around the country still face daunting technical, safety and financial hurdles. Yet they are edging closer to unlocking the therapy's vast potential to correct genetic defects and, in theory at least, treat almost every disease known to man. Barely five years old, the therapy involves the injection of DNA into human cells, with the goal of replacing damaged genes or producing proteins that stimulate the immune system.

Industry executives say they are confident of winning Government approval by the end of the decade for the first of what could be a steady stream of potent drugs.

"Compared to two years ago, when this was something wonderful for the 21st century, there are now some products in clinical trials and progress is being made," said Dr. Alain B. Schreiber, president and chief executive of Vical. "This is no longer a pipe dream."

Indeed, a number of developments, on both the research front and the business side, are speeding the transition from laboratory vision to doctor's shelf:

* Big drug companies like Bayer, Rhone-Poulenc Rorer and Sandoz, in addition to Baxter and Merck, are pouring money into joint development deals with the fledgling companies, including Applied Immune Sciences of Santa Clara, Calif., Somatix Therapy of Alameda, Calif., and Systemix of Palo Alto, Calif.

* About 100 products are undergoing trials. Viagene's AIDS therapy is in the second of three phases of Food and Drug Administration trials, the first gene therapy to get that far.

* In April, Genetic Therapy Inc. of Gaithersburg, Md., won a broad patent relating to one form of gene therapy. The decision represents a big boost not only to the company but also to the credibility of the therapy itself because it in effect marks the patent office's recognition of the technology's usefulness.

Simple in concept but complex in implementation, gene therapy may yet prove more difficult to master than researchers now think. For openers, most gene therapy companies use various viruses as carrier mechanisms when injecting DNA into cells. Although the viruses are "deactivated," their ability to mutate raises the specter of a therapy causing infection.

And Wall Street remains skeptical about the therapy, at least in the short term, despite the recent advances. The shares of most of the publicly traded companies involved have continued to languish in the single digits, dragged down by the general malaise of all but the largest biotech stocks since 1993.

Analysts say many gene therapy companies lack sufficient financing to complete their first products and will not be able to raise money in the public markets. While the large drug makers have shown a great willingness to underwrite the technology, they also know they can play a waiting game and acquire desperate companies at deep discounts. Some of the gene therapy companies simply will not survive.

But it will be worth the wait for those that do, say gene therapy proponents.

"If you swing for the fences, the technology will have a very hard time maturing," said Robert T. Abbott, Viagene's president and chief executive. "Genetic diseases are a swing for the fences."

The ultimate goal of gene therapists is gene replacement, which would totally alter the fate of people born with genetic diseases like cystic fibrosis, diabetes and hemophilia. But a cure for these diseases, perhaps with a single injection, is many years down the road.

Much closer at hand is immunotherapeutics, or the use of gene therapy to produce proteins that work like sophisticated vaccines. In swinging for this home run, genetic therapists are trying to send the ball far beyond genetically engineered therapeutic proteins, the first generation of biotechnology.

Those drugs, like Chiron's Interleukin 2 or Amgen Inc.'s Epogen, are copies of naturally occurring proteins that are manufactured in giant fermentation vats. Injected into the body, they can compensate for genetic deficiencies or stimulate the immune system. But they cannot be directed to the precise place that they are needed. That presents a problem since proteins can be toxic if they wind up in the wrong place and in the wrong concentration.

Gene therapy solves that problem, at least in theory. The idea is to inject synthesized DNA directly into cells that are part of an organ that is diseased. The DNA is then supposed to cause proteins to be made in the right place and in the right amount.

But gene therapy presents its own problems.

One is the use of viruses and the safety risks they bring. While genetically engineered proteins and conventional drugs both work primarily outside cell walls, gene therapies must penetrate not only the cell but also the nucleus within the cell in order to modify the genetic material there. To break through, most treatments have used a genetically modified virus -- usually the mouse leukemia virus -- as a carrier, or "vector," for the DNA. Now, Vical and other companies are working to use nonviral vectors, which in the past have lacked the potency to deliver adequate amounts of genes to cells.

Another hurdle is the targeting of appropriate cells. Because no one has developed a gene therapy that can be injected in the bloodstream and find its way to the right cell, most regimens are performed ex vivo, or outside the body. That means blood or tissue samples are removed from a patient. The appropriate cells are separated from the mass of material, treated with a gene therapy vector and then returned to the patient.

Some companies, including Viagene, are now exploring treatments that are performed in vivo, or inside the body, for those immunotherapies in which broad distribution of the gene is desirable, as with AIDS. An in vivo treatment would have far greater commercial potential because it could be packaged in vials and handled like any conventional drug that is injected.

But ex vivo treatment, though costly and cumbersome, is the only approach that has been proved effective so far.

Developed by researchers at the National Institutes of Health under the direction of Dr. W. French Anderson, ex vivo therapy was first performed in 1990 on two girls, ages 4 and 9, who lacked a critical immune system enzyme, adenosine deaminase, giving rise to "the boy in the bubble" syndrome. The girls now lead relatively healthy lives.

In May, researchers at Children's Hospital in Los Angeles reported that the first infants to be treated for this deficiency with gene therapy also appear to be healthy and to be producing the needed enzyme on their own.

The patent that was received in April by Genetic Therapy Inc., which collaborated with Dr. Anderson, covers all forms of ex vivo gene therapy. M. James Barrett, Genetic Therapy's chairman and chief executive, said the company expects to derive substantial revenue from licensing others to pursue ex vivo treatments. That should free his company from the need to raise additional money on Wall Street, he said.

Nonetheless, the race is on to find an in vivo treatment, and Viagene appears to be ahead with its treatment for H.I.V., the virus that causes AIDS. The treatment is injected directly into muscle tissue. There, it prompts the production of so-called killer T cells, which recent studies indicate may play a greater role in the body's ability to fight viruses and cancers.

The use of viral vectors in this and other gene therapies remains controversial, however. Some experts fear they may prompt cancers or regain their virulence by recombining with nondisabled viruses that are typically present in the body. Adenoviruses, which normally attack the respiratory system, could be partly disabled for treating diseases centered in the lung, like cystic fibrosis, but have shown a disturbing tendency to migrate to other parts of the body.

Indeed, in some of the early attempts at gene therapy, the quantity of virus "in and of itself can be a toxic event," said Philip Noguchi, director of cellular and gene therapy at the F.D.A.'s Center for Biologics. There may be little choice, he added. "From a biological perspective, if it's not dangerous it's probably not going to work," he said. "You must accept risk in order to achieve effective therapy."

Vical is attempting to reduce the risk by forsaking viral vectors in favor of so-called naked DNA, which is either injected in a solution or enclosed in fat molecules known as lipids. After several years of work, researchers have increased the ability of these nonviral vectors to deliver genes by several thousandfold, prompting one editorial in the journal Science to call naked DNA "the biological equivalent of cold fusion."

Vical is collaborating with Merck on the use of naked DNA gene therapy in the development of vaccines for hepatitis B, herpes simplex, tuberculosis, H.I.V., influenza, hepatitis C and human papilloma virus. [Just this week, Vical's collaborators at Merck Research Laboratories in West Point, Pa., announced that they had successfully immunized animals against the flu virus using naked DNA. The DNA vaccine appeared to protect against several strains of flu virus at once, unlike current flu vaccines, which must be changed each year.]

"We've been focused on nonviral delivery all along," said Vical's Dr. Schreiber. "For the larger market, you would have to be a fool to want any piece of a virus in there."

Glaxo Wellcome PLC continued its cautious march back into the vaccine business by unveiling a DNA vaccine collaboration with Powderject Pharmaceuticals PLC, a fledgling Oxford, England-based drug company.

Glaxo bailed out of vaccines nearly a decade ago. But the world's biggest drug maker made a strategic about-face in recent years -- enticed by the promise of genetically engineered vaccines that rejuvenate patients' malfunctioning immune systems to fight diseases, as well as providing the traditional protection from infection in the first place.

The agreement with Powderject, potentially valued at as much as $300 million, is a bold bet that delivering synthetic chunks of DNA directly into infected cells will prove to be an effective therapy in disorders ranging from HIV to hepatitis B and cancer. However, Glaxo officials admitted that a commercial payoff on the vaccine gamble isn't likely until around 2005 at the earliest.

Return to Normalcy?

According to some London analysts, the transaction also may signal a gradual return to normal operations for Glaxo following the recent collapse of merger talks with SmithKline Beecham PLC. SmithKline is one of the world's leading vaccine producers, said these analysts, and a partnership with Powderject might wind up wasteful, duplicated research if Glaxo revived the proposed corporate marriage or mounted a hostile assault against SmithKline.

Powderject's stock soared 102.6 pence, or 33%, to 417 pence ($6.89) on the Glaxo accord, which represents one of one of the biggest potential payoffs to date in Europe's rapidly expanding biotechnology industry. Glaxo agreed to acquire a 7.7% stake in Powerject at 246 pence per share, a 10% premium over the average closing price for the most-recent 60 days.

Powderject's core technology, originally developed at Oxford University, makes it possible to "shoot" medicines through the skin of patients at supersonic speeds. The five-year-old company, which made its stock market debut in London last year, claims that each of its shots is painless and less-expensive than a conventional syringe-and-needle injection.

The collaboration with Glaxo focuses on a narrow application of that technology -- shooting gold particles coated with DNA to a thin layer of skin brimming with a special class of immune cells -- called dendritic cells. The use of gold particles may sound like a questionable luxury at a time of intense, cost-containment pressure on health-care providers. "But gram for gram, gold is quite cheap compared to DNA," quipped Michael King, a pharmaceutical analyst with the London unit of French bank Societe Generale.

'Tremendous Boost'

Powderject's chairman, Paul Drayson, explained that the helium-gas-propulsion system used in a device resembling a pocket flashlight makes it possible to put 95% of the gold chips carrying the DNA vaccine within the target skin layer. Moreover, because the particles race through the skin at three times the speed of sound, they easily penetrate the membrane of the dendritic cells -- solving the vexing problem of how to deliver synthetic DNA without injuring or killing target cells.

"The payoff is a tremendous boost in efficacy compared to conventional injections which are difficult to control," Dr. Drayson added.

Once inside the dendritic cells, a DNA vaccine that Powderject is testing against hepatitis B stimulates production of antibodies, biological sentinels that set off an immune-system attack when they encounter their target viruses in the blood. In addition, DNA vaccines also activate other types of immune cells -- mustering added medical punch that the company hopes can offer protection to the 20% of patients who don't respond to hepatitis B vaccines currently available.

The British company's biggest rival is Merck & Co. of the U.S., which is developing its own version of DNA vaccines with biotechnology ally Vical Inc. Dr. Drayson insisted that Powderject has strong patent protection, but many analysts expect a protracted battle in patent courts with Vical before scientific claims are finally resolved.

Glaxo has no intention of challenging SmithKline or Merck in the mainstream vaccine business -- but the therapeutic potential of DNA vaccines is much closer to the British giant's core prescription drug operations. "If the potential of DNA vaccines is actually realized, it would be a big opportunity -- as well as a possible threat to some of our key franchises," admitted John Tite, a Glaxo research executive.

SAN DIEGO, CA -- (INTERNETWIRE) -- 12/21/99 --  Vical Incorporated (Nasdaq:VICL) announced today that it has received a payment of $1.6 million from Merial, a joint venture between Merck and Co., Inc. and Aventis S.A., (formerly RhÂne-Poulenc S.A.) for the initial exercise of options under a 1995 agreement covering naked DNA vaccines for animal health applications.

Merial retains for a limited period the option to acquire additional exclusive licenses to our naked DNA technologies to develop and commercialize DNA-based vaccines to prevent infectious diseases in domesticated animals. If Merial exercises additional license options and markets these vaccines, cash payments and royalties on sales would be due to Vical.

• Vical Incorporated, The Naked DNA Company(tm), is focused on the development of pharmaceutical product candidates based on its patented gene delivery technology. A number of therapeutic and vaccine product candidates are currently under development for the prevention or treatment of cancer, infectious diseases and metabolic disorders by Vical and its collaborative partners, including Merck & Co., Pfizer Inc, Aventis Pasteur (formerly Pasteur Mérieux Connaught), Aventis Pharma (formerly RhÂne-Poulenc Rorer), [Centocor Biotech Inc.], Merial and Boston Scientific Corporation. Allovectin-7, which uses a lipid-DNA complex to help the immune system recognize and attack cancer cells, is in Phase II and Phase III testing in certain patients with metastatic melanoma and in Phase II testing in patients with unresectable head and neck cancer. Leuvectin, which uses a lipid-DNA complex to stimulate an immune response against cancer cells, is in Phase II testing in patients with kidney cancer and prostate cancer. Vaxid, a naked DNA vaccine to prevent relapse of B-cell lymphoma, is in Phase I/II testing. In collaboration with the National Cancer Institute, a naked DNA vaccine to treat metastatic melanoma is in Phase I/II testing.
• Merial is the world's leading animal healthcare company dedicated to the research, development, manufacture and delivery of innovative pharmaceuticals and vaccines for use by veterinarians, farmers and pet owners to improve the health, well-being and performance of all animal species. The company is also market leader in the development and production of poultry breeding stock. Merial was founded in 1997 through the merger of the animal health and poultry genetics businesses of Merck and Co., Inc. and RhÂne-Poulenc S.A. (now Aventis S.A.).
• [...]

• Contact: Alan R. Engbring, Vical Incorporated Phone: 858-646-1127
• Contact: Robert H. Zaugg. Ph.D.  Phone: 858-646-1127

Vical Inc. became the latest biotechnology company to take a gene-therapy roller-coaster ride, as its stock at one point in the day tumbled 36% on a report that a patient had died in one of its experiments. By day's end, the stock recovered some of what it had lost.

In the highly charged atmosphere surrounding gene therapy -- a field that has been rocked in recent months by the death of a young patient and disclosures of poor government oversight -- any negative news can hurt a company.

Thursday, a Washington Post article noted that a researcher indicated a patient's death was "probably" related to his participation in a gene-therapy trial conducted by the company, and that one of the universities participating in the study had "halted" its participation. The death and the university's reaction to it were discussed at a public National Institutes of Health meeting on Wednesday.

At 5:30 a.m. Pacific time, Vical Chief Executive Alain Schreiber got the first call from an analyst and began dialing his largest shareholders. In Nasdaq Stock Market trading, the stock of the San Diego-based company fell to as low as $36.50 from $57.0625 at 4 p.m. Wednesday. At 4 p.m. Thursday, the stock was at $49.6875, down $7.375, or 13%, on the day.

Mr. Schreiber placated investors, telling them the label "probably" was chosen only because a researcher couldn't completely rule out the possibility that an advanced cancer patient didn't die from gene therapy. The patient's death, in 1999, took place more than two months after being injected with a gene-therapy drug. The company said it feels the death was due to the patient's underlying condition. But the researcher on site was forced to pick among three options -- unrelated, definitely related, or the middle option, "probably" related, Mr. Schreiber said.

It was the biosafety committee at another site involved in the study that raised concerns about the death and asked for more information. While it waited for the information, it chose to stop enrolling new patients. The committee, at the University of South Florida, Tampa, will review the information later this month. Research at about 40 other participating sites continues, Mr. Schreiber said.

Despite the turmoil at Vical, Thursday actually provided potential relief for companies involved in gene therapy. A pivotal federal committee agreed to go back to the drawing board in its efforts to decide how quickly, and in what detail, side effects in gene-therapy trials should be reported to the National Institutes of Health.

The NIH's Recombinant DNA Advisory Committee was torn by dissenting views about how much was too much. While a subcommittee suggested that researchers continue providing the NIH with a host of safety reports, other members of the committee questioned whether the NIH should even be in the business of collecting such data. When no consensus emerged, the committee threw the issue back to a working group to be reviewed in time for the committee's June meeting.

The issue is of vital importance to gene-therapy researchers and companies, because NIH records generally are open to the public. The Food and Drug Administration, which also collects similar data, doesn't release its records.

Gene therapy burst into the news last fall, when a teenager from Tucson died in an experiment at the University of Pennsylvania. But while politicians and the press have spent the year focusing on accusations of lax government oversight and shoddily run clinical trials, the science of gene therapy has been making quiet, steady progress.

Little by little, researchers say, they are finding new and better ways to deliver genes to their target cells. Clinical trials of gene-based treatments for hemophilia are showing promise, and certain cancer patients appear to respond to gene therapy. And the field got a big ego boost this spring when French scientists reported they had used gene therapy successfully to treat babies born with defective immune systems.

And so it was with mixed emotions -- worry and regret, enthusiasm and a little bit of defiance -- that 2,500 gene therapy scientists from around the nation, and the world, gathered here this week for the third annual conference of the American Society of Gene Therapy. It has been, they agreed, a roller coaster of a year.

''It's finally coming together,'' said Dr. Savio L. C. Woo, a soft-spoken molecular biologist who, as the society's president, found himself testifying in Congress on more than one occasion in the past several months. ''We are finally seeing this glimpse of hope that this new technology is going to bear fruit in the clinic. And yet we have had this serious setback.''

The setback, of course, was the death of 18-year-old [Jesse Gelsinger (born 1981)], who suffered from a metabolic disorder and had volunteered for an experiment to test gene therapy for babies with a fatal form of the disease. His presence was acutely felt at the conference. In his presidential address, Dr. Woo asked those attending to stand in a moment of silence for ''the young man who has given his life in pursuit of an ideal treatment'' and ''to assure him in spirit that the scientific community is galvanized to do our very best to help fulfill his dream one day.''

Mr. Gelsinger's death has had ripple effects throughout the field. It touched off a discussion of financial conflict of interest in gene therapy experiments, prompting the society to issue guidelines barring members from running clinical trials if they had a financial stake in the companies sponsoring their studies.

It has also caused a slowdown in human experiments; an official from the Food and Drug Administration, which recently issued more stringent regulations to govern the conduct of gene therapy clinical trials, said here that requests to test gene therapy in people had dropped off sharply in recent months.

''The field is in transition,'' said [Dr. Robert Wallace Malone (born 1959)], a researcher at the University of Maryland. ''I think it is transitioning to a more sober, realistic recognition of what is achievable. I believe there is a new humility in the field.''

Dr. Rajendra Kumar-Singh is typical. At 32, Dr. Kumar-Singh is an assistant professor of ophthalmology at the University of Utah and is just starting his career in gene therapy. He is studying treatments for retinitis pigmentosa, an inherited condition that causes blindness. By administering an infusion of gene-altered viruses to baby mice, he said, he has staved off blindness for 10 weeks in animals that would otherwise have lost their sight within 17 days of birth.

But Dr. Kumar-Singh said he would be cautious before testing the therapy in people. ''Perhaps we were moving too fast,'' he acknowledged, echoing the sentiments of some critics, including [Dr. Harold Eliot Varmus (born 1939)], the former director of the National Institutes of Health, who felt gene therapy researchers moved too quickly into clinical trials. Still, Dr. Kumar-Singh is optimistic about gene therapy's future. ''We are seeing a revolution in medicine right now,'' he said, ''and gene therapy is at the forefront of it.''

The idea behind gene therapy is disarmingly simple: to treat or cure disease by giving healthy genes to patients with defective ones. But in the 10 years since the first human experiment was conducted by researchers at the National Institutes of Health in Bethesda, Md., the results have been largely disappointing.

One reason is that scientists have had trouble devising delivery vehicles, called vectors, that can direct genes into the proper cells and get them to function once they are there. Vectors are typically made by inserting genes into deactivated viruses that target certain cells, literally infecting them with healthy DNA.

Mr. Gelsinger's death, however, raised safety questions about one of the most commonly used viruses, adenovirus, which causes the common cold. In most patients, adenovirus produces mild, flulike symptoms. But in Mr. Gelsinger, it provoked a fatal immune response.

Even before Mr. Gelsinger's death, molecular biologists had been turning their attention to a different virus, the adeno-associated virus, or AAV, which is thought to be safer than adenovirus. Now, a team of researchers at Children's Hospital of Philadelphia, Stanford University and Avigen Inc., a biotech company, is reporting promising results in hemophilia patients who received a genetically engineered form of AAV that contains the gene for production of Factor IX, a protein that is needed to make blood clot.

The team, led by Dr. Katherine High of the Philadelphia children's hospital, began a small safety study after they found the treatment could essentially cure dogs of hemophilia. So far, six patients have been enrolled. The first three received the gene therapy at a dose so low it was not effective in the dogs. But to the scientists' surprise, the patients began expressing minute amounts of Factor IX -- enough that it improved their conditions and reduced their need for the standard hemophilia treatment, injections of Factor IX.

''We were delighted, but skeptical,'' said Dr. Catherine S. Manno, who is running the clinical trial. ''Only after repeated measurements over a period of months did we become convinced that these levels were real.''

Although the hemophilia experiments are still in their early stages, leaders in gene therapy say that, aside from the French work, Dr. High's research is the most exciting in the field. Dr. Donald B. Kohn, an immunologist at Children's Hospital of Los Angeles, said, ''Hemophilia may be within a shot of being cured by this approach.''

The word cure -- the ''C-word,'' as [Dr. Robert Michael Blaese (born 1939)], who performed the first human gene therapy experiment in 1990, calls it -- is one that gene therapy researchers have learned to use with caution.

''We will not talk about cure,'' said Dr. Alain Fischer of the Necker children's hospital in Paris. ''Cure means forever.'' Yet Dr. Fischer's work on babies with a form of severe combined immune deficiency, or SCID (pronounced like skid), is the closest thing gene therapy has seen to a cure. His study provided gene therapy advocates with what they have long lacked: proof, in principle, that the concept can work.

Dr. Fischer's findings, published in April in the journal Science, were a popular topic among the scientists in in Denver. ''The field is now an established principle in medicine,'' said Dr. Theodore Friedmann, a professor of pediatrics at the University of California at San Diego who said he had been pursuing gene therapy since 1968. ''That's the story -- a brand new concept in biomedicine, irretrievable, and it's beginning to work.''

In the Science article, Dr. Fischer recounted the successful treatment of two babies, both of whom had normal immune systems 10 months after receiving gene therapy. In Denver, he told reporters that he had since treated three more children. Of the five, four have had ''a complete or near complete recovery'' of their immune systems, he said. The outlook for the fifth, who had severe complications from infection at the time of treatment, is less certain.

Experts say one reason Dr. Fischer was successful where others had failed is that SCID is particularly suited for gene therapy. The first human gene therapy experiment, conducted by Dr. Blaese and [Dr. William French Anderson (born 1936)], was directed at curing adenosine deaminase, or ADA, deficiency, another form of SCID. But it has been difficult to gauge that study's outcome because a drug, PEG-ADA, is available to children with the disease, and scientists consider it unethical to withdraw the medicine.

In Denver, however, an Italian researcher, Dr. Claudio Bordignon, announced that he had solved that problem by being ''lucky to find a patient who was unlucky'' -- a child who does not respond well to PEG-ADA. The patient, now 5, was given her first infusion of corrective genes in 1996 and was slowly weaned from the drug. She has not taken PEG-ADA for one year now, and her immune system is functioning better now than before, Dr. Bordignon said.

He theorized that the drug might have somehow suppressed the effects of the gene therapy. ''After discontinuation of PEG-ADA,'' he said, ''all the genetically engineered cells have come out.''

Whether, or when, gene therapy will ever become a part of mainstream medicine remains a matter of debate. Most gene therapy experiments are still being conducted in animals, and those being tested in people are producing mixed results.

At the Denver conference, for instance, scientists from [Vical Incorporated], a San Diego company, reported preliminary results from 52 patients who have been enrolled in a 70-patient study of gene therapy for advanced skin cancer. In the study, a gene that alerts the immune system to recognize and kill foreign tissue is administered directly into the patients' tumors.

According to Dr. Deirdre Y. Gillespie, Vical's chief operating officer, 10 percent of patients responded extremely well to the therapy, with their tumors shrinking in size by 50 percent or more. In another 15 percent of patients, the therapy stopped the progression of disease, and the therapy reduced the size of tumors in some of those patients as well.

Those may not sound like spectacular results, but as Dr. Gillespie noted, there is currently no effective treatment for advanced skin cancer, and the patients in the study had failed all other therapies. In a sense then, the cancer study encapsulates the state of gene therapy as a whole.

Dr. Blaese put it this way: ''For the average person, the progress may look to be minor. But you need to put the developments of this field in context. We just started 10 years ago.''

Merck & Co. has initiated small human trials of a new experimental HIV vaccine that is sparking hope among AIDS scientists.

The vaccine, the result of what Merck says is the largest preclinical vaccine-research program in its history, has been able to prevent laboratory monkeys exposed to a virulent strain of HIV from getting sick, according to people familiar with the studies. Merck won't discuss details of the vaccine's progress, but confirms that it presented its data in two closed-door sessions last month, one to the AIDS Vaccine Advisory Committee of the National Institutes of Health and another to leading AIDS activists.

The company, based in Whitehouse Station, N.J., also confirms that it began testing the vaccine for safety in healthy, uninfected volunteers last week.

"After the presentation, members of the committee were excited," said Nobel laureate David Baltimore, who chairs the NIH committee. Dr. Baltimore, who is also president of the California Institute of Technology, declined to discuss the results further because of a confidentiality agreement all participants at the meeting signed.

Merck's new vaccine isn't the first to go into human trials. At least half a dozen companies are testing or have tested vaccines in people, most notably VaxGen Inc., Aventis SA, Chiron Corp. and even Merck itself. But top scientists who have seen Merck's latest animal research say that its current strategy -- which combines its new vaccine with an earlier one -- is among the most promising. And because Merck is one of the world's largest and most experienced vaccine manufacturers, its efforts attract great interest.

Researchers are particularly impressed with the thoroughness and scale of Merck's research effort, which began in the mid-1980s but shifted into high gear about four years ago. The company carried out sweeping monkey studies to winnow down a number of different vaccine candidates to the one it is now trying in humans.

"They did a beautiful, systematic job," says Douglas Richman, a leading AIDS researcher at the University of California at San Diego who heard the results at the NIH committee meeting. He also declined to elaborate because of the confidentiality pact.

Merck says it won't discuss specific results of its monkey experiments until it makes a formal presentation at a scientific forum in Colorado in April. Company researchers agreed to speak at all only because word of the vaccine is spreading quickly among members of the AIDS science and treatment community.

Merck officials say they are especially concerned that publicity will raise false hopes. The AIDS virus is "particularly insidious," says the company's chief of vaccine research, Emilio Emini. The new vaccine, he says flatly, "might fail." And even if it were to prove successful, it wouldn't be available for years.

Still, the select group of the nation's leading AIDS scientists and activists who saw Merck's research data say they are impressive. Some of these individuals, who spoke on condition of anonymity, say the experimental vaccine stopped monkeys from getting sick after they were injected with a hybrid AIDS virus containing strains that can make humans and monkeys sick. Most unvaccinated control animals, say these people, died or developed AIDS.

While Merck's new vaccine is primarily designed to prevent uninfected people from contracting HIV, the company says it also wants to test whether the vaccine can be used to treat people already infected with the AIDS virus, an experimental concept that is attracting much scientific interest.

Importantly, Merck's vaccine apparently didn't prevent the establishment of infection, what scientists call "sterilizing immunity." The animals did get infected, but they were able to control and contain the virus, say people familiar with the results. So far these vaccinated animals show no signs of disease. It isn't known how long this protection will last. Some experts fear that this approach may merely delay, rather than fully prevent, the onset of AIDS.

Still, the AIDS research community has been moving toward this "partial protection" strategy. Late last year, scientists at Harvard University, collaborating with Merck, used a different vaccine to achieve similar results -- protecting monkeys not against infection but against the development of disease. A research team from Emory University and the National Institute of Allergy and Infectious Diseases, and another team from Yale University and the Aaron Diamond AIDS Research Center in New York, recently presented similar findings with yet other approaches.

Merck's is the first of those vaccines to enter human trials, although there are plans to test the others in people, too. Wyeth Lederle Vaccines, a unit of Madison, N.J.-based American Home Products Corp., owns the rights to develop the Yale/Aaron Diamond vaccine and says it has more development work to do before it puts its product into people.

The concept of a vaccine that doesn't prevent infection but simply keeps the virus in check is controversial. But Dr. Baltimore says that, in fact, vaccines rarely if ever sterilize the body against an invading microbe. Rather, he points out, most vaccines prime the body's immune system to beat back an infection once it develops.

Most viruses, like polio or small pox, can be completely purged by a strong immune system, but a hallmark of HIV is its ability to evade even the most robust immune-system attack and lurk in the body for life. "So you can't expect a vaccine to clear the virus," says Dr. Baltimore, "because the immune system itself doesn't do that with HIV."

Yet Merck hopes that the vaccine might still be able to fully prevent infection in humans; after all, the doses of the AIDS virus used on the laboratory monkeys were much greater and more virulent than what humans are usually exposed to. Merck researchers caution, however, that this idea is speculation and still requires testing.

Even if a vaccine merely delayed the onset of AIDS, rather than preventing it entirely, many researchers believe that could still reap huge benefits. Parents in Africa, where the disease has left more than 12 million orphans, could gain more time to raise their children. And if the vaccine reduced the amount of HIV circulating in a person, it might also lower the risk of transmitting the virus, thus slowing the epidemic.

Classical vaccines work by stimulating the immune system to produce antibodies, and VaxGen of Brisbane, Calif., is in advanced stages of human testing of an AIDS vaccine designed to do that. But many experts doubt that this vaccine will succeed, since experiments suggest the antibodies it produces are unlikely to neutralize HIV. Donald Francis, president of VaxGen, says the only way to know if the vaccine works is to complete the human testing, which may be finished by the end of this year.

Merck's new experimental vaccine, like other "partial protection" vaccines, works by triggering a different part of the immune system, the so-called killer T-cells, which attack the virus by destroying cells it has already infected. It builds on an earlier experimental Merck vaccine that uses so-called "naked DNA," parts of HIV's genetic material injected directly into people, a technology Merck licensed from Vical Inc. of San Diego, Calif. But that approach stimulated relatively weak killer T-cell responses.

According to those briefed about Merck's research, the company's new vaccine hooks HIV genes onto another virus -- the adenovirus. In its natural form, the adenovirus can cause colds in people, but Merck has rendered it defective, making it incapable of causing colds or AIDS.

Harnessing this virus to carry HIV genes into cells greatly augments the amount of killer T-cells that attack HIV. But Merck is getting its best results by combining the approaches: first priming the immune system with the naked DNA vaccine and then boosting the response with the adenovirus-based vaccine. One possible complication is that people already carry antibodies to the adenovirus, which could blunt the vaccine's effectiveness.

The healthy volunteers in Merck's human study will not be exposed to the AIDS virus; the study's purpose is to see how safe the vaccine is, rather than how well it works. If Merck finds the vaccine is safe and stimulates killer T-cells in humans, it says it will put the vaccine into HIV-positive people in about four months -- one sign that it is serious about testing the vaccine for the treatment of infected people as well as the protection of uninfected ones.

A team of scientists has discovered how the deadly Ebola virus hijacks human cells, opening potential avenues to new drugs and a vaccine.

Ebola kills roughly 80% of those who contract it, usually causing them to bleed to death in a few weeks. Since its discovery in 1976, the virus has killed 1,000 people, according to the World Health Organization. Recent Ebola outbreaks in the Republic of Congo and neighboring Gabon in central Africa have killed several dozen people. The virus's mysterious appearances, rapid course and lack of treatment have made it a daunting challenge for public health -- and a potential weapon for terrorists.

Now, a research team says it has answered important basic questions about how Ebola, and a related virus, Marburg, commandeer human cells. Their findings shed light on possible ways to design drug therapies. The Ebola virus, shaped like a shepherd's crook, targets tiny fat platforms called "lipid rafts" that float atop the membrane of human cells. These cholesterol-rich rafts are the viruses' gateway into cells, the assembly platform for making new virus particles, and the exit point where new virus particles bud.

This virus-like particle, the harmless hollow shell of the Ebola virus, may one day be useful in creating an Ebola vaccine. The particle has been disarmed of its genetic material and is unable to replicate.

The team's report, set to be published Monday in the Journal of Experimental Medicine, "is highly significant," says Eric Freed, principal investigator in the laboratory of molecular microbiology at the National Institute of Allergy and Infectious Diseases, part of the National Institutes of Health in Bethesda, Md. "It adds another human pathogen to the growing list of viruses that use lipid rafts."

The findings add new insight into the life cycle of viruses and how they subvert human cellular mechanisms. It is a critical early step toward one day creating drugs that would stop viruses from replicating. Ebola and Marburg, both members of a family of hemorrhagic-fever viruses called filoviruses, share the reproduction strategy of viruses ranging from measles and influenza to HIV, which causes AIDS. Their ability to traffic aboard lipid rafts may help them evade the human immune system, researchers speculate.

One of the researchers, [Sina A Bavari (born 1959)], at the U.S. Army Medical Research Institute of Infectious Diseases in Fort Detrick, Md., says, "By understanding how Ebola and Marburg are entering into and budding from the cells, it gives us an avenue to come up with new therapeutics that would alter these pathways." Dr. Bavari's co-author is M. Javad Aman, of Clinical Research Management Inc. in Frederick, Md.

The push to probe Ebola has assumed greater urgency since the Sept. 11 terror attacks, as fears have grown about the existence of weaponized forms of Ebola or Marburg. Such bioterror weapons were in development within the former Soviet Union, according to Kenneth Alibek, a Soviet bioweapons scientist who defected to the U.S. and wrote the 1999 book "Biohazard."

Says [Sina A Bavari (born 1959)], "It doesn't take a Nobel laureate to figure out that something so deadly could be transformed into a bioterror agent." Yet-to-be-developed vaccines and antiviral drugs could be critical elements of bioterror defense against the viruses.

Because their targets, the lipid rafts, are made of fat, known agents such as the popular cholesterol-lowering statin drugs may offer one possible model for new drug therapies. Antifungal drugs, such as nystatin and filipin, that break up fat could be other possible models.

In their research, [Sina A Bavari (born 1959)] and [Drs.] Aman produced harmless copies of the Ebola virus that, it turns out, may be a possible vaccine candidate. The virus-like particles, known as VLPs, are hollow protein shells, gutted of their virulent genome. The researchers say the hollow proteins could elicit an immune defense, because they signal the body that an Ebola invasion is under way without actually causing disease.

"You're basically fooling the body," [Sina A Bavari (born 1959)] says, "but the virus cannot replicate itself." The hollow-protein model is one approach being used in the search for a vaccine for HIV. Future studies will examine whether such a strategy is safe and effective against Ebola and Marburg, he adds.

The researchers say their creation of the hollow VLPs could allow Ebola research to take place more freely in laboratories across the country, on regular lab benches outfitted with suction hoods, to prevent the escape of particles. At present, scientists have to wear space suits and work behind air-locked doors in high-containment Biosafety Level 4 labs when handling live Ebola virus.

Another National Institutes of Health researcher working on Ebola, [Dr. Gary Jan Nabel (born 1953)], of the Vaccine Research Center at NIAID, applauds the report. Dr. Nabel has published studies showing that Ebola vaccine created using experimental "naked DNA" -- the opposite of the hollow VLPs, in a way -- protected monkeys against lethal Ebola infection when given with a booster shot of the vaccine. His team is partnering with [Vical Incorporated], a San Diego biotech company, to produce the vaccine prior to launching studies of its safety in humans.

"People are waiting with bated breath for a drug or vaccine," [Dr. Gary Jan Nabel (born 1953)] said. "These [studies] show that we're on the road that will get us there."

[Vical Incorporated] and the Ohio State University announced that the U.S. National Institute of Allergy and Infectious Diseases (NIAID) will fund a one-year Small Business Technology Transfer Research (STTR) grant to collaborate on a preclinical research project to develop DNA vaccines against anthrax. 

[Vical Incorporated] will recognize the revenue from the grant as the work is performed. The grant does not change the company's forecast for a net loss of between $28 million and $32 million for 2002. 

Vical's patented naked DNA technology allows scientists to construct rings of genetic material, known as plasmids, that express one or more proteins once inside the body. The anthrax vaccine would use this proprietary technology to establish immune system defenses against the bacterial proteins produced by anthrax that combine to cause toxic effects. This approach may have significant safety and manufacturing advantages over traditional vaccines that use live, weakened, or dead pathogens to produce an immune response. 

Initial research on this type of anthrax vaccine was conducted in mice by [Dr. Darrell Ray Galloway (born 1946)] at Ohio State University and the U.S. Naval Medical Research Center. His research produced the initial finding indicating that a DNA vaccine could be developed that would protect against aerosolized or weaponized anthrax spores.

Vical Inc. shares rose 26 percent yesterday after the biotechnology company said it would begin testing the safety of its experimental anthrax vaccine in people by the end of this year. Vical rose 58 cents, to $2.81. Twenty-two people in 2001 contracted anthrax and five died after spores of the bacteria were sent through the mail. Better vaccines are needed because of the risk of more bioterrorist acts, said Eric Schmidt, an SG Cowen analyst. ''It's a new area for Vical, and there's a lot of interest'' in anthrax, said Mr. Schmidt, who has a ''market perform'' rating on Vical shares and does not hold them. A United States government panel said last year that a new anthrax vaccine was needed because the only one available, made by the BioPort Corporation, was based on outdated technology. That vaccine requires a six-dose regimen over 18 months. Vical, based in San Diego, has data that shows its vaccine protected rabbits from anthrax. Vijay B. Samant, the company's chief executive, said that Vical cannot test whether its vaccine protects people from anthrax because that would require exposing patients to a potentially fatal infection. The company will instead inoculate volunteers and monitor whether they develop complications.

The first test in humans of an experimental vaccine against the deadly Ebola virus began yesterday, government scientists said.

The vaccine, administered by injection, was designed to try to prevent outbreaks of the lethal hemorrhagic fever where it occurs naturally in Africa. It is also a bid to thwart any efforts to use the highly infectious virus as a bioterrorist agent.

As part of a standard three-stage process, the first phase involves testing the vaccine's safety. Scientists also plan to measure immune responses among volunteers receiving the shots.

No effective treatment exists against the viral infection, which kills up to 90 percent of victims quickly from severe internal bleeding. Ebola was discovered in 1976 in the Republic of Congo, then Zaire. This week, the World Health Organization reported a new outbreak of Ebola in that country, attributing 11 deaths in as many cases to it.

The experimental DNA vaccine is synthesized using modified, inactivated genes from the Ebola virus. Because it does not contain any infectious material from the virus, recipients cannot get the disease, said [Dr. Gary Jan Nabel (born 1953)], who directs the institute's Vaccine Research Center.

Researchers plan to test the vaccine on 27 people, ages 18 to 44. They are expected to receive three injections of either the experimental vaccine or a placebo at the National Institute of Allergy and Infectious Diseases in Bethesda, Md., over two months. They will then be monitored for a year.

The first volunteer, Steve Rucker, a 36-year-old research nurse at the institute, said in a phone interview that he felt fine after the vaccine was injected in his left arm yesterday.

Mr. Rucker, of College Park, Md., said he was participating because he believed that the findings from animal tests were ''extremely promising.''

[Dr. Gary Jan Nabel (born 1953)] said in a telephone interview that only a handful of individuals, mostly institute employees, had volunteered for the study and that his team needed at least 20 more volunteers. Details are posted at www.clinicaltrials.gov.

The vaccine is made by [Vical Incorporated], a biotechnology company in San Diego that has collaborated with [Dr. Gary Jan Nabel (born 1953)]'s team as they tested the vaccine on animals.

The goal is to use the Vical vaccine and another one to protect against Ebola in a prime-boost strategy. Under those conditions, the Vical vaccine would be given first to prime the immune system. Then a different vaccine, which uses an adenovirus (that causes colds) would bolster the immune system that had been primed by the Vical vaccine. The second vaccine is still being developed for human use; the first tests in volunteers are expected to begin next year, Dr. Nabel said.

Tests of the prime-boost strategy are expected to begin in 2005. But the schedule depends in part on the findings from the current tests.

Of the volunteers in the Vical study, 21 will get injections of the vaccine and 6 a placebo. Neither the volunteers nor the scientists will know which volunteers received which type of injection until the scientists analyze the results.

The government's program to defend against bioterrorism has helped accelerate development of a vaccine, said Dr. Anthony S. Fauci, the institute's director. ''An effective Ebola vaccine not only would provide a life-saving advance in countries where the disease occurs naturally, it also would provide a medical tool to discourage the use of Ebola virus as an agent of bioterrorism,'' he said.

The human study is based on animal experiments in which Dr. Nabel's team gave the two vaccines separately to guinea pigs and monkeys. When the researchers exposed the animals to Ebola virus, they found 100 percent protection, Dr. Nabel said.

A single injection of the adenovirus vaccine provided faster protection than expected.

Because it is unethical to deliberately expose humans vaccinated against Ebola to the virus because the disease is so lethal, scientists and government officials might have to apply what they call ''the two-animal rule.'' Government officials recently adopted the rule for possible licensing of a vaccine that proves safe in humans and shows adequate protection against a deliberate infection in two species of animals.

[Dr. Gary Jan Nabel (born 1953)] said he envisioned that health workers might someday vaccinate against Ebola the same way epidemiologists used the smallpox vaccine to eradicate that disease. The strategy involved vaccinating all possible contacts of the initial cases and then their contacts as well.

Scientists might test the vaccine in an outbreak of Ebola under emergency conditions.

Scientists at corporate and government laboratories are making surprising headway in the effort to develop a vaccine against the virus responsible for the global outbreak of severe acute respiratory syndrome.

Merck & Co. of the U.S., Aventis S.A. of France and several prominent government and private labs are among those racing to find a vaccine, aided by a fast-emerging body of science about the virus and prodded by U.S. Health and Human Services Secretary Tommy Thompson. Some scientists think it may be only a few more months before several promising candidates are ready for testing in animals, reflecting the telescoping of a process that could typically take several years.

There is no certainty of success, however, and significant hurdles loom. Doctors at Chinese University of Hong Kong, for instance, say they have found evidence the virus mutates quickly, which would complicate vaccine efforts. Still, scientists believe they already have a clear road map for developing a public-health weapon that could prevent the mysterious pneumonia-like ailment from becoming an annually recurring global nightmare.

Clear Message

"All the scientific pieces are in place," says Larry Anderson, a SARS researcher at the U.S. Centers for Disease Control and Prevention. "Whether one of these candidates ultimately works or not is another story."

Even at an accelerated pace, it could take several years before a vaccine would be available for, say, a broad public inoculation program. But companies say that as part of the effort to win regulatory approval, potential vaccines that prove safe in animals could be tested much sooner in clinical trials in health-care workers, who have been both victims of the current epidemic and a major source of unwitting transmission. People living in proximity of a subsequent outbreak could be candidates for such trials as well.

One reason for optimism is the quick response by several drug and biotechnology companies. Typically, companies stand on the sidelines in such situations until a clear picture of science and a market emerges. No major company joined the effort to make an HIV vaccine until many years after the AIDS virus was discovered.

What is more, liability worries have prompted some companies to curtail vaccine research or get out of that line of business altogether. And many companies see vaccines as high-risk ventures with little economic payoff. It is far from clear that a SARS vaccine would generate much, if any, profit, though it certainly would be a public-relations coup.

The hunt for a SARS vaccine was jump-started when the Health and Human Services Department summoned about 20 companies to a meeting in Washington on April 9 -- several days before the culprit virus was definitively identified by the World Health Organization. Secretary Thompson, who was criticized sharply for his agency's poor response to the anthrax attack in 2001, arrived late at the 90-minute meeting and was the last to speak. His message was clear: The U.S. government wasn't going to wait for ideas to percolate up from academia or for interest to emerge among corporate scientists. The SARS vaccine effort, he told attendees, won't be "business as usual."

He also made it clear that the SARS outbreak could be a model of how well the U.S, and its corporate allies can respond to a bioterror threat.

At Merck, SARS was already on the radar screen. Several days earlier, on April 4, Merck's head of basic research, Tony Ford-Hutchinson, and 25 senior scientists interrupted a meeting to listen in on a SARS conference call with the CDC and the National Institutes of Health. They decided to learn more about coronaviruses, one of which is considered the cause of SARS.

One sign of the importance the SARS vaccine has within Merck is that Emilio Emini, who spearheaded the company's protease AIDS drug project in the early 1990s and now directs its search for an AIDS vaccine, also is in charge of the SARS project. Using the approach it has taken against HIV and another virus, which can cause uterine cancer, Dr. Emini's team is expected to investigate whether bits of the virus's protein guts or outer envelope, together or separately, can trigger a protective immune response.

Other research organizations are taking a more tried-and-true approach, which is to simply kill the virus, then test whether the deadened version can make animals immune to a viral infection. Work on a "killed" vaccine is under way at the National Institute for Allergy and Infectious Diseases in the U.S., says its director, Anthony Fauci, who believes it may be the quickest path to a defense against SARS.

He put Brian R. Murphy, NIAID's top respiratory virus expert, in charge of the effort. Dr. Murphy's lab is now growing large amounts of the new virus in a bid to create a defanged version. Using a chemical called formalyn, researchers hope to fuse together proteins from the virus, making it difficult for it to infect new cells. The hope is that when administered to an animal or human, this viral corpse will trick the immune system into thinking the body is being attacked by a live virus and unleashing the same anti-viral protection that would be generated by a real intruder. Primed in this way, the body can expel the virus before it gains a foothold.

Similarly, Aventis, which is ramping up a SARS vaccine project, is likely to focus on deactivating the coronavirus, says Michel De Wilde, head of research and development at the company's Aventis Pasteur unit. Inactive polio virus is the basis of Aventis's polio vaccine.

Obvious Target

But some research teams are skeptical. Even a deadened virus might still be able to cause an infection, says Gary Nabel, director of NIH's 170-person Vaccine Research Institute. His team has concluded that using one or more of the virus's proteins -- rather than the entire virus -- can induce immunity and might be safer.

One obvious target is the so-called spike protein that creates a distinctive corona on the virus's outer surface. "A lot of people are going to be interested in the spike gene most," says Linda Saif, a researcher at Ohio State University. Her lab will soon conduct lab experiments to determine if the spike produces antibodies potent enough to block the virus from entering cells. This would provide strong evidence that a vaccine based on the spike might work.

A similar tack is already under way in Rotterdam, at Erasmus University in the Netherlands. In mid-April a lab run by Albert Osterhaus found that macaque monkeys become ill when exposed to the SARS virus. This means experimental vaccines can be tried out in lab animals, a necessary step before testing it people.

Questions Remain

It is uncertain how well any of these approaches will work. A vaccine that has already been developed against a coronavirus that infects cats isn't very potent, Dr. Osterhaus says, and often fails to prevent infection. Another worry, says Steven Jones, head of immunopathology at the National Microbiology Laboratory in Winnepeg, Canada, is that in some current SARS patients, it appears to be the cascade of immune system agents released in response to the virus -- rather than the virus itself -- that is causing lung damage and death. An effective vaccine, therefore, would have to generate a well-calibrated response that is protective but not damaging.

Finally, some companies, especially smaller biotech firms in the U.S., are waiting to enter the hunt until it is clear that U.S. federal funding will be available. Vical Inc., of San Diego, has obtained about $10 million in bioterror funds to work on vaccines against Ebola and anthrax threats but says it is holding off on SARS. "Until funding sources are clearly established, we are not going to work on it," says Vijay Samant, chief executive.

Eramus's Dr. Osterhaus believes a SARS vaccine will prove a financial boon. Because the virus is new to humans, he says, uninfected people don't have immunity to it, suggesting a vaccine will be in great demand. He says several companies have approached him to collaborate, and he has singled out one that he declines to name right now. Indeed, he notes, while the identification of the SARS virus was the result of a rare global teamwork, the hunt for a vaccine "will be a competitive effort."

—Elena Cherney and Matt Pottinger contributed to this article.        [ See Matthew Forbes Pottinger (born 1973) ]

Write to Antonio Regalado at antonio.regalado@wsj.com, Michael Waldholz atmichael.waldholz@wsj.com and Gautam Naik at gautam.naik@wsj.com

Vical Inc., a San Diego biotechnology company developing infectious-disease treatments, said it signed an agreement with the U.S. to manufacture an experimental SARS vaccine.

Terms were not disclosed. The manufacturing order for a severe acute respiratory disease preventive medicine came from the National Institutes of Health and was in addition to one announced in July for West Nile virus and another in 2002 for the Ebola virus.

Vical shares rose 38 cents to $6.20 on Nasdaq.

Separately, VaxGen Inc., a biotechnology company developing HIV and smallpox vaccines, said it completed a licensing agreement with the U.S. Army for an anthrax vaccine. Shares of Brisbane, Calif.-based VaxGen gained 41 cents, or 3.4%, to $12.44 on Nasdaq. 

Two DNA-based vaccines for animals have become the first to make it from the lab into commercial use, buoying hopes for similar vaccines for human diseases, such as Ebola, HIV/AIDS and SARS.

One already has protected some salmon that could be headed for your dinner table soon. Fisheries scientists have known since the early 1990s that some wild salmon returning from the open Pacific Ocean to spawn in British Columbia carry a virus that wreaks havoc on the fish farms that dot the coastal inlets in Canada's westernmost province.

The domesticated fish are Atlantic salmon, favored by farmers for their docile temperament and fast growth -- qualities that make them the Hereford cattle of aquaculture. But unlike indigenous types, the transplanted species have little natural resistance to the local virus, which causes fatal hemorrhaging, and can contract it from the wild fish swimming past their pens.

In mid-2001, a destructive epizootic, the animal equivalent of an epidemic, struck, sickening Atlantic salmon in 36 farms over a two-year period. In some pens, more than 90% of the young fish succumbed. "It's devastating to watch your animals die and not be able to do anything to stop it," says Linda Sams, environmental manager at Marine Harvest Canada, a fish-farming concern in Campbell River, British Columbia.

The large loss of fish spurred new efforts to develop a vaccine against the virus, which causes the untreatable disease called Infectious Hematopoietic Necrosis, or IHN. This time, scientists tried arming the immune system using a snippet of viral genetic code translated into DNA, rather than a traditional approach, such as culturing a weakened IHN virus.

The unorthodox approach sprang from a surprising discovery more than a decade earlier: An enzyme that fireflies use to glow could be detected in the muscles of mice months after they were injected with the gene that makes it. No one had thought that injecting DNA in a muscle would do anything. Researchers of human diseases then reasoned they could use DNA to train immune systems to resist foreign invaders, such as HIV, that had eluded conventional vaccines.

Scientists at Aqua Health, a unit of Novartis in Prince Edward Island, Canada, solved the problems of potency and mass production. They took advantage of work by Ottawa scientists, who put a gene for a protein that covers the IHN virus in a ring of DNA, or plasmid, which some bacteria use to share genetic code. A single shot of vaccine behind the salmon's dorsal fin contains 10 micrograms of these DNA rings.

Plasmids make their way into muscle cells, much as infecting viruses do, where they spur the cells' protein-making machinery to pump out copies of the viral protein. By tricking these cells to make telltale proteins of a virus, the DNA-based vaccines better mimic infections and so can confer greater protection.

Like salmon swimming upstream, the viral protein produced by the fish cells migrates into the bloodstream. The fish gird for battle by producing antibodies and preparing white blood cells to fight the virus, a response traditional vaccines barely stimulate. After a few months, the muscle cells containing the plasmids die -- as normal muscle cells would -- so fish vaccinated as youngsters carry virtually no traces of vaccine except their immunological armor.

More than six million salmon were inoculated while the vaccine was evaluated by Canadian regulators. Tests showed the vaccine, called Apex-IHN, protected the fish without adverse effects. In July, Canada licensed the product for sale.

Also in July, the U.S. Department of Agriculture gave its OK to a DNA-based vaccine from drug maker Wyeth to protect horses from West Nile virus. Until now, DNA vaccines had worked in experiments with mice, but were disappointing in humans and some large animals, which required large doses of the DNA plasmids to work.

Wyeth improved production of plasmids by bacterial colonies, and found ways to purify and stabilize the DNA on a commercial scale, said Hsien-Jue "Steve" Chu, head of research at the company's Fort Dodge Animal Health unit. Adding proprietary chemical boosters to the vaccine also helped. "The improvements were the result not of any single button that we pushed but a very systematic approach to take the whole process apart," he says.

Enhancements in production and potency could make a DNA-based vaccine viable in human research. "We've gone from six or seven years ago being bitterly disappointed by the low responses to expecting at this point that DNA vaccines will yield pretty good immune responses" in humans, says John Eldridge, vice president for vaccine discovery at Wyeth.

Recent human tests of vaccines against HIV and Ebola being developed by the National Institutes of Health have led to measurable antibodies and responses in white blood cells. The NIH has been working on several vaccines with Vical Inc., San Diego, whose technology aided Novartis on the salmon vaccine. This year, an NIH-run pilot plant in Maryland will begin producing DNA for use in vaccines.

Write to Scott Hensley at scott.hensley@wsj.com

[Inovio Biomedical Corporation] has announced that the focus on the company's technology at the American Society for Gene Therapy's (ASGT) 9th Annual Meeting demonstrated the potential of electroporation for delivering gene-based treatments in humans.

Presentations relating to six pre-clinical studies and a clinical trial employing the company's MedPulser® DNA Electroporation System were made by Inovio representatives, [Vical Incorporated], and the University of South Florida in conjunction with H. Lee Moffitt Cancer Center & Research Institute (Moffitt).

In general, these studies indicated that the use of [Inovio Biomedical Corporation]'s non-viral electroporation technology to deliver therapeutic DNA demonstrated statistically significant levels of gene expression and immune response in a safe and tolerable manner, indicating its promise as an alternative to viral and other non-viral DNA delivery methods.

The process of electroporation uses short electrical field pulses to temporarily open cell membranes so that therapeutic DNA can enter target cells. Once inside the cells, this DNA may then elicit the production of proteins to stimulate an immune response or provide therapeutic gene expression.

The presentations at the ASGT meeting featured results relating to the use of Inovio's technology for delivering different DNA vaccines and other gene-based therapeutics designed to treat cancer, infectious diseases, and protein-deficiency diseases.

"Electroporation has demonstrated the ability to enhance immune responses to DNA vaccines," stated [Vijay B. Samant (born 1952)], president and CEO of [Vical Incorporated].  "We continue to use Inovio's electroporation technology in our Phase 1 gene-based IL-2 trial for melanoma and are exploring its potential for other therapeutic DNA vaccine applications."

[Vical Incorporated] has an exclusive license to use Inovio's MedPulser® DNA Electroporation System for a DNA plasmid encoding IL-2 for melanoma, a non-exclusive license for DNA vaccines designed to treat HIV and CMV, and an option to license the technology to deliver antigens relating to other infectious diseases.

[...] [Dr. Avtar Singh Dhillon (born 1961)], president and CEO of [Inovio Biomedical Corporation], said : 

1. "We were pleased to see our DNA electroporation technology broadly displayed at such an important scientific conference,"

2. "Growing evidence shows that electroporation has the potential to enable or enhance the ability of DNA vaccines to generate clinically relevant immune responses and the ability of gene-based therapeutics to treat protein-deficiency diseases such as hemophilia."

3. "Highlighting positive results from a human study represents a milestone for Inovio and our proprietary delivery platform."

4. "Our goal is to establish electroporation as a preferred method of DNA delivery and to ensure Inovio's technology is a widely accepted method for commercializing DNA therapy."

The following is a summary of the presentations made by Inovio and collaborators at the ASGT meeting:

• "Electroporation-Based Gene Therapy," part of a workshop, "Non-Viral Gene Therapy"  ( Richard Heller, PhD, University of South Florida, professor of molecular medicine )
  • • Interim results of a Moffitt-sponsored Phase I clinical trial delivering plasmid DNA encoding a cytokine, interleukin-12, into tumor cells to mount an immune response against malignant melanoma were presented by Dr. Heller, a co-researcher with Dr. Adil Daud, principal investigator of the study and an oncologist at Moffitt and the University of South Florida, College of Medicine.
    • With 15 patients treated to date, results indicate that electroporation-mediated gene delivery was well tolerated, reproducible and without any dose limiting toxicity.
    • The study showed efficient expression of IL-12 by the plasmid DNA, with demonstrable immune responses.
    • Prior pre-clinical studies conducted by Heller and his team found that electroporation of IL-12 plasmid also resulted in IL-12 expression in the tumor and an 80 percent complete regression of a very aggressive melanoma in a mouse model.
    • Based on an assessment of international, peer-reviewed scientific publications, Inovio believes this is the first-ever study using electroporation to deliver a gene-based treatment in man.
• "Overview of Gene Vaccines"  ( Alain P. Rolland, Pharm.D., Ph.D., [Vical Incorporated], senior vice president of product development )
  • • - A study in rabbits indicated that electroporation enhances the onset and magnitude of antibody production against an encoded cytomegalovirus (CMV) antigen in the company's CMV vaccine program.
    • - A study demonstrated that vaccination by DNA electroporation enhances anthrax lethal toxin neutralizing antibody production by several orders of magnitude.
    • - A study in rabbits indicated that plasmid DNA is cleared from injected muscles after intramuscular injection followed by electroporation and risk of integration into the host genome is negligible at 60 days.
• "Industrial Liaison: Clinical Developments in Gene Vaccines" - workshop   ( Michael Fons, PhD, Inovio's executive director, corporate development )
  • • Dr. Fons spoke about clinical electroporation and reviewed the pre-clinical and regulatory steps needed to begin clinical evaluation of plasmid delivery with Inovio's proprietary technology.

• "Protection Against In Vivo Tumor Growth after Electroporation-Enhanced DNA Vaccination with the Hepatitis C Virus Non-Structural 3/4A" - poster presentation  ( Rune Kjeken, Gustaf Ahlen, Jonas Soderholm, Torunn Tjelle, Iacob Mathiesen, and Matti Sallberg )
  • • A study conducted with Tripep AB of Sweden indicated that electroporation enhanced cellular immune responses capable of eliminating HCV-antigen expressing cells.
    • Results indicated that immunization without electroporation was ineffective. The company believes these results validate the concept of electroporation-augmented therapeutic vaccination against hepatitis C virus infections.
    • The two companies are aiming to initiate a phase I clinical trial using this vaccine by the end of 2006.
• "DNA Vaccines: Induction of Humoral and Cellular Responses Via Skin or Muscle Immunization Enhanced by Electroporation" - poster presentation  (Lei Zhang, Georg Widera, Susan Bleecher, and Dietmar Rabussay )
  • • This presentation summarized a study that demonstrated the capability of certain methods and devices, which are proprietary to Inovio, to elicit powerful immune responses with either skin or muscle as the target tissue.
    • Immunization via skin electroporation can be performed non-invasively, which affords potential advantages over invasive muscle electroporation.
• "Feasibility of Cutaneous Gene Therapy Using a Factor VIII Gene and a Marker Gene in Factor VIII-Deficient Mice by Non-Invasive Electroporation" - poster presentation  ( Lei Zhang, Amy Goldbeck, Hongbo Lu, Edward Nolan, Dietmar Rabussay, and Steve Fakharzadeh )
  • • This presentation described a preclinical study conducted in collaboration with the University of Pennsylvania showing that injection of DNA encoding the blood clotting factor VIII (FVIII) into the skin of hemophilic mice gave rise to the expression of the FVIII gene.
    • This confirms previous results indicating that electroporation-enhanced DNA delivery may be an attractive method of DNA delivery for the treatment of genetic diseases amenable to plasmid DNA-based gene therapy.