Lyme Disease Vaccine/ protein known as decorin binding protein (DbpA), found on the organism (B. burgdorferi )

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Lyme Disease Vaccine

In 1998, MedImmune entered into an agreement with Pasteur Merieux Connaught

(PMC) to co-develop DbpA as a second generation European, and possibly

improved U.S., vaccine for the prevention of Lyme disease. Pursuant to the

agreement, PMC has gained exclusive worldwide rights to MedImmune's

technology related to a protein known as decorin binding protein (DbpA),

found on the organism (B. burgdorferi ) which causes Lyme disease.

MedImmune would receive milestone payments and royalties on sales of any

vaccine incorporating DbpA.

Lyme disease is the most commonly reported arthropod-borne disease in the

United States. Virtually every state within the U.S. has reported cases of

Lyme disease, with an annual nationwide reported incidence of 14,646 new

cases in 1998, up from 12,289 in 1997. According to a publication in The

Journal of Infectious Diseases, the true incidence may be 10 times greater

than reported to the Centers for Disease Control and Prevention. In

addition, the study suggests that Lyme disease may be a far greater public

health problem that utilizes more medical resources than official data

suggest. Lyme disease is also reported in Europe, Japan, China, Russia and

Australia. The disease is caused by a bacterium know as B. burgdorferi and,

in the United States, is transmitted through a tick, Ixodes scapularis,

which is most commonly found on the white-footed mouse or deer. When the

tick feeds on a human host, it can transmit the bacteria to the host,

thereby beginning a Lyme disease infection.

The Company has evaluated a number of potential Lyme disease vaccine

candidates identified within its own laboratories, as well as in other

laboratories around the United States DbpA in collaboration with scientists

at Texas A & M. They have shown that animals immunized with DbpA can be

protected from infection with the B. burgdorferi bacterium and that

antibodies against DbpA can inhibit the growth of many strains of the Lyme

disease-causing bacteria not inhibited by antibodies against OspA (a surface

protein of B. burgdorferi), including some species of Lyme bacteria commonly

found outside the United States. These results suggest that DbpA may provide

an improved Lyme disease vaccine candidate or, alternatively, a supplement

to the vaccine candidates currently in development.

Unlike antibodies to vaccines in development by other companies, DbpA

antibodies can be given to mice during the early phase of infection and

still clear the bacterium from animals. This may allow a significantly

greater window of opportunity for a protective immune response to clear

infection. The Company believes that DbpA is the only protein identified

from B. burgdorferi to date for which this effect has been demonstrated.

Forward-looking statements: This material may contain, in addition to

historical information, certain forward-looking statements that involve

risks and uncertainties. Such statements reflect management's current views

and are based on certain assumptions. Actual results could differ materially

from those currently anticipated as a result of a number of factors,

including risks and uncertainties discussed in the Company's filings with

the U.S. Securities and Exchange Commission. Successful development and

commercialization of any of the Company's product candidates will require

thorough clinical evaluation and will be subject to regulatory approval from

authorities such as the FDA in the U.S. There can be no assurance that such

approvals will be obtained.

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