However, the expected infection rate for the 314 black volunteers who received the vaccine was reduced by 78 percent — a finding the researchers said was unexpected. The rate was reduced by 67 percent for all nonwhite volunteers other than Hispanics.

"This is the first time we have specific numbers to suggest that a vaccine has prevented HIV infection in humans," VaxGen vice president Phillip Berman said in a prepared statement Sunday night. "We're not sure yet why certain groups have a better immune response."

The Brisbane, California-based company said it planned to continue developing the vaccine and will examine more closely why it worked better in blacks and Asians than it did in whites and Hispanics.

The experiment, which initially involved 5,400 people at high-risk for the disease, had been criticized by some activists who say it could encourage risky behavior. Even if the vaccine proved effective on some level, there might be no way to tell if it has worked on a particular individual.

But VaxGen has won widespread praise from doctors and the FDA for its handling of an ethically difficult test. The company counseled patients in the experiments to practice safe sex because the vaccine may not work and because one-third of the volunteers received the placebo.

The publicly traded company's stock has risen and fallen dramatically during the last year as rumors of the experiment's results swirled. It sold for as low as $4.81 a share and as high as $23.25. It closed at $13.02 in trading on the Nasdaq Stock Market Friday.

Experts believe a vaccine is the only way to stop the worldwide AIDS epidemic, which has already killed 20 million people and infected 40 million more.

Merck & Co. is developing a different type of vaccine that has showed promise in early human testing, but researchers caution they are still years away from proving whether it works.

By DEBORAH KONG, AP Minority Issues Writer

SAN FRANCISCO - Researchers trying to learn more about why an AIDS vaccine appeared to work well in a small number of black volunteers may have trouble finding people for further studies, advocates and educators warn.

Suspicion of medical research runs deep among many blacks, they say, and the reason can be summarized in one word: Tuskegee.

In the Tuskegee Syphilis Study, conducted by the federal government between 1932 and 1972, researchers withheld medical treatment from poor, black men in Macon County, Alabama, for experimental purposes. The men were not told they had syphilis, and weren't treated for the disease even after penicillin became available. By the time the study was exposed, 128 men had died of syphilis or related complications.

More than 30 years later, the damage done by that study still lingers, black activists say — even hindering efforts to halt the AIDS epidemic.

"Many African-Americans are suspicious of the health care system and suspicious of doctors and scientists because there's a legacy of mistreatment," said Phill Wilson, executive director of the Los Angeles-based Black AIDS Institute.

"Even though people may or may not know the specifics of the Tuskegee trials, they know that there are health disparities and that blacks often get inferior treatment based on race."

J. Lawrence Miller, executive director of the Black Educational AIDS Project in Baltimore calls it the "Tuskegee mentality."

"That distrust has become cultural," Miller said. "How do you fight culture? You can't, except for education."

Blacks have been hit harder by AIDS than any other racial or ethnic group in America. They represented about half of new HIV cases reported in the United States in 2001 — the largest of any group, according to the Centers for Disease Control and Prevention.

"Given the disproportionate impact that the AIDS epidemic has on black people, we stand to gain the most by the development of an effective HIV/AIDS vaccine," Wilson said. "We need to do a better job of recruiting black volunteers for these clinical trials."

Blacks made up just 6 percent of the 5,009 volunteers who participated in VaxGen Inc.'s AIDS vaccine experiment.

The experiment showed that there were 78 percent fewer infections among black volunteers who took the vaccine than in those who received a placebo.

In whole numbers, that meant four of the 203 blacks who received the vaccine became infected while nine of the 111 who received the placebo were infected. The company said those results were statistically significant and showed that the vaccine has value. But some observers warned that the sample size was too small.

There were similar results among the small number of Asians involved in the study.

VaxGen spokesman Jim Key said it was difficult for the company to recruit minority participants.

"There was still considerable skepticism among people of color regarding medical research and specifically regarding HIV vaccine research. There are so many myths and fears and conspiracy theories regarding HIV," Key said. "My hope is that this will be a catalyst."

Steve Wakefield, of the HIV Vaccine Trials Network, worries that if too few blacks participate in research, scientists won't have enough information to help people, both here and in Africa.

Wakefield, the network's associate director for community relations, said he is always asked about Tuskegee when he makes presentations to minority groups in this country.

In Africa, "the one question I get asked from country to country is 'How many black Americans have already taken this product or been in research with this?'" said Wakefield, who is black.

By Ben Hirschler, European Pharmaceuticals Correspondent

LONDON (Reuters) - Switzerland's Roche Holding AG on Monday priced its new HIV drug Fuzeon at a record-breaking 18,980 euros ($20,570) a year, fueling controversy about the cost of AIDS treatments.

Fuzeon, also known as T-20, is the first in a new class of drugs known as fusion inhibitors designed for people resistant to other AIDS medicines. Unlike existing drugs that work inside the cell, it blocks HIV from entering healthy human immune cells.

Roche said the high cost -- more than any other AIDS drug on the market -- reflected the complexity of manufacturing the product, involving more than 100 production steps.

"This drug is 10 times more complex to manufacture than the next most complex class of drug in the HIV arena, which is the protease inhibitors," David Reddy, head of Roche's HIV business, told Reuters in a telephone interview.

He said Fuzeon had cost 840 million Swiss francs to develop, excluding marketing expenses. More than half of that was accounted for by clinical trials, and the lion's share of the rest reflected investment in specialist manufacturing facilities. Pure research costs were only around one percent.

Reddy declined to comment on the profit margin that Roche would enjoy on sales of Fuzeon, which it believes could eventually have peak annual sales of up to one billion francs ($740 million).

PRODUCTION DIFFICULTIES

A twice-daily injection that is given in combination with existing drugs, Fuzeon is expected to win marketing approval from regulators in both Europe and the United States next month.

In the meantime, however, Roche is launching a pre-license special-access program under which the drug will be available in certain European Union countries.

Reddy said it was not yet clear which countries would participate in the scheme or how many patients would be involved.

Reddy said he did not envisage Fuzeon ever being suitable for use in Africa -- the epicenter of the global AIDS pandemic -- given the drug's very high cost of production.

Global pharmaceutical companies, including Roche, have bowed to pressure from humanitarian groups in recent years to slash the cost of life-saving AIDS drugs in Africa and other poor countries. But Reddy said Fuzeon was in a different category.

"Even if we were to price this drug at cost, it is not going to be the type of drug that is suitable for the developing world," he said.

"We've thought long and hard about the price of this and we're coming through with something that we really believe is fair, based upon what we've had to invest and the risks that we've taken."

Including those already involved in clinical trials and an early free-access program, some 3,500 people worldwide are likely to be on the drug by the end of March.

The total should rise to 12,000-15,000 by the end of 2003 -- a lot fewer than initially hoped, reflecting production difficulties at the main manufacturing facility in Boulder, Colorado, where initial yields were lower and cycle times longer than expected.

With analysts estimating that as many as 50,000 patients in North America and Europe are resistant to other AIDS therapies and ready for Fuzeon, demand is expected to outstrip supply for the foreseeable future. By the end of 2004, Roche and its partner Trimeris Inc. of the U.S. expect to be able to supply the drug to a maximum of 32,000 people, rising to 39,000 by the end of 2005. ($1=.9228 Euro)

AZT Patent Case Dismissed

Friday March 7, 10:46 pm ET