The European Commission has approved United Kingdom R&D State aid for the establishment of a Vaccines Research Institute.The aid, worth ECU 33.7 million up to the year 2004, finances fundamental research and basic industrial research.The main objective of the Institute is to provide support for fundamental research within the fields of immunology and infectious diseases.This type of research was formerly funded by the government, but now involves private sector finance. The participation of the private sector will be through Glaxo, which will provide the capital required to establish, build and equip the Institute. Glaxo is an integrated research-based group of companies which conducts research and develops, manufactures and markets ethical pharmaceuticals.The project gives Glaxo the possibility to exercise an option on the exclusive licence for developing and exploiting any invention that might arise from the activities of the Institute.Glaxo and the public sector have an equal share in the recurrent costs: 50% of the recurrent costs are borne by Glaxo (42% of the total budget) and the other half by the public sector (42% of the total budget). The capital investment will be entirely financed by Glaxo (16% of the total budget).The aid beneficiary is the Institute. Glaxo will benefit from the aid indirectly whenever it exercises its right to an exclusive licence.