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.

Shares of Genetic Therapy Inc. surged 17.6 percent today after the company was assigned a broad patent covering a fundamental approach to gene therapy, a type of treatment that scientists hope will one day successfully combat hereditary defects like cystic fibrosis and diseases such as cancer.

"Genetic Therapy Inc. now has a very important strategic position," said A. Paul Boni, a biotechnology industry analyst with the New York equity research firm of Mehta & Isaly. "I don't think people expected this patent. It's almost like patenting the idea of writing on paper."

The patent appears to cover any method of reintroducing into a patient some of his own cells after they have been genetically altered in the laboratory. Depending upon how they were manipulated, these cells theoretically can cause the patient's own body to produce disease-fighting proteins, to correct for a genetic defect or to increase its number of immune cells.

Therapeutic breakthroughs have been slow in coming for gene therapy, although more than a dozen clinical trials are under way. The patent is expected to give Genetic Therapy a solid edge in the gene therapy field for now and put it in a strong bargaining position to negotiate cross-licensing agreements on biotechnology patents held by other companies.

Genetic Therapy's shares jumped $1.50 today, to $10, in Nasdaq trading.

The inventors named on the patent were Dr. W. French Anderson, a pioneer in gene therapy, and two colleagues, Dr. Steven Rosenberg and Dr. Michael Blaese. The patent actually belongs to the National Institutes of Health, where the initial research described in the patent took place. The patent is exclusively licensed to Genetic Therapy, a biotechnology company based in Gaithersburg, Md.

Dr. James M. Wilson, director of the Institute for Human Gene Therapy at the University of Pennsylvania, said that the issuance of the patent was reassuring to the biotechnology industry, which has complained loudly that the Patent Office has set unreasonably high hurdles for the granting of biotech patents.

"What's really important is that the U.S. Patent Office has issued a patent with broad claims in the gene therapy field," Dr. Wilson said. "It's a good sign for biotechnology generally, since proprietary rights are basic to the development of this industry. It's a sign that if we are innovative, the Patent Office will recognize our contributions."

While acknowledging that Genetic Therapy's patent is broad, competing biotechnology companies played down its commercial significance.

"It's quite a nice piece of intellectual property for them, but I don't think it's the sweeping coup their press release implies," said Dr. Robert T. Abbott, president of Viagene Inc., which is based in San Diego.

Dr. Abbott said researchers were turning to new types of gene drugs, referred to as "in vivo" gene therapy, which can be directly injected into the body. The patent covers "ex vivo" treatments, which require that some of a patient's cells first be removed from the body and then re-injected after they have been altered in the laboratory.

The cost of the new generation of gene drugs is expected to be far lower than for treatments employing the more time-consuming pioneering gene therapy technologies.

Even Dr. Anderson, who is a consultant to Genetic Therapy and is now at the University of Southern California, is experimenting with such gene drugs.

"The industry is moving toward in vivo," he said. "The difficulty is we won't get there for 10 or 15 years. In vivo has problems that ex vivo doesn't. Ex vivo will be the way it is done for the next decade."

Scientists are investigating using gene therapy to treat a range of disorders including hemophilia, Gaucher's disease and H.I.V., as well as cystic fibrosis and cancer.

Sandoz Ltd. said yesterday that it would acquire Genetic Therapy Inc. of Gaithersburg, Md., for about $295 million, or $21 a share.

Since 1991, Sandoz, based in Basel, Switzerland, has owned 3.6 percent of Genetic Therapy, a leading gene-therapy company working on treatments for cancer, AIDS, cystic fibrosis, hemophilia and Gaucher's disease, an inherited enzyme deficiency disorder.

Following close on the acquisition in April of Viagene by the Chiron Corporation for about $95 million, the deal underscores the strategic importance of gene therapy to pharmaceutical and biotechnology companies alike. By treating disease with the body's own genetic material, gene therapy holds the potential to correct genetic defects and, in theory at least, treat almost every disease known.

Sandoz plans to pay for Genetic Therapy with cash, according to its chief financial officer, Raymund Breu. Dr. Daniel Vasella, president of Sandoz's drug division, said the company did not expect revenue from Genetic Therapy for five years, when its first treatment was expected to be ready for sale.

Shares in Genetic Therapy soared on the news yesterday to close at $20.875, up $5.625, in Nasdaq trading. The deal helped lift the stocks of other gene-therapy companies including Vical Inc., up 62.5 cents, to $9.375; Somatix Therapy, up 50 cents, to $4.625, and Applied Immune Sciences, up 81.25 cents, to $6.5625.

Dr. Vasella, who is president of the Sandoz Pharma division, said in a telephone interview: "We have come to the conclusion that gene therapy will play a major role in medicine in the next century. Genetic Therapy is a company we know very well, a company that is a world leader in gene therapy."

Sandoz Pharma has worked with Genetic Therapy since 1991 on research and development projects, including one in clinical trials in the United States to treat glioblastomas, fast-growing brain tumors. Sandoz is now initiating trials in Europe. Sandoz also owns 60 percent of Systemix Inc., a cell-therapy company in Palo Alto, Calif.

"Obviously Sandoz is very committed to Genetic Therapy," said Paul Boni, an analyst with Mehta & Isaly. "They could have gotten a lot of other gene therapy companies for a lot less money," he said. He noted that Genetic Therapy had the broadest base of academic collaborators of any gene therapy company, an asset difficult to quantify but of value to Sandoz.

In March, Genetic Therapy was awarded an exclusive license to a patent received by the National Institutes of Health for a type of gene therapy called ex vivo. Ex vivo gene therapy involves taking cells out of the body, treating them with altered genes and replacing them in the body, typically to make up for deficient or defective genes. To date, all successful gene therapy treatments have been of the ex vivo type.

But Dr. Vasella said that the patent was not a determining factor in Sandoz's decision to buy Genetic Therapy. "We believe the long-term future of gene therapy is "in vivo," he said, referring to gene-therapy treatments performed in the body, without the need to harvest cells. Although Genetic Therapy is known to be developing in vivo treatments, it has said little about them publicly.

M. James Barrett, Genetic Therapy's chief executive, said in a statement: "The combination of Genetic Therapy Inc.'s cutting-edge technology in gene therapy and Sandoz's clinical development, regulatory, marketing and sales expertise will give us a solid platform for further development." Mr. Barrett will continue to lead Genetic Therapy after the acquisition, the companies said.