WELLCOME'S share price surged 24p to 655p yesterday as the market reacted to positive news from the drug company, which has suffered a battering recently thanks to poor sales and queries over the effectiveness of its Aids drug.
Wellcome has signed a deal with Vertex Pharmaceuticals in the US to collaborate on the development of protease inhibitors for the treatment of HIV infection and Aids.
This is thought to be a promising area of exploration, although the first inhibitors are as yet only in the early stages of pre-clinical development.
The deal involves Wellcome making payments to Vertex of up to dollars 42m, including an initial payment of dollars 15m, research support and payments for achieving agreed development milestones.
Wellcome is to pay for all development activities at both companies, including any clinical trials that may be undertaken, and in exchange will receive exclusive rights to develop, manufacture and market Vertex's protease inhibitors in the US, Europe and other countries outside the Far East.
As well as joint development of Vertex's existing HIV protease inhibitors, the two companies are planning a five-year research programme to design and develop other protease inhibitors.
Vertex will receive a 'substantial' royalty on sales of products emerging from the programme with Wellcome and will retain certain rights to manufacture and co-promote these products.
Shares in Wellcome also gained ground following an upbeat presentation to analysts on prospects for an over-the-counter version of the herpes drug Zovirax in the US.
Some analysts now think the drug - already sold OTC in the UK as a cold sore treatment - could be approved for OTC sales in the US next year. Wellcome filed its application to switch the drug from prescription-only status in August.