Filed at 6:40 p.m. ET

WASHINGTON (Reuters) - The first attempt to develop a vaccine to prevent AIDS has failed, vaccine-maker VaxGen Inc. said on Monday, but there was a ray of hope it could help blacks and Asians.

Long-awaited results from VaxGen's trial of AIDSVAX show the vaccine reduced the rate of HIV infection by just 3.8 percent in 5,000 men and women considered at high risk in the United States, Canada, Puerto Rico and Netherlands.

``Overall, what we see is the trial failed,'' VaxGen President Dr. Donald Francis told a conference call.

The vaccine was tested only against the strains of the virus found in North America and Europe, so the findings do not apply to Africa and Asia, the regions hardest-hit by AIDS.

Most AIDS researchers had not expected AIDSVAX to protect very many people from infection with the human immunodeficiency virus. But they were intrigued by the findings that the vaccine seemed to offer protection to blacks and Asians but not to whites and Hispanics.

For the study VaxGen gave injections of either the vaccine or placebo to 5,108 gay and bisexual men and 309 high-risk women. They started in 1998 and then watched to see who went on to become infected with HIV.

All the volunteers were told about safe sex practices such as using condoms to protect themselves and partners.

When VaxGen's figures were analyzed, they showed that Asians, blacks and self-described ``others'' who got the vaccine had a 67 percent lower rate of infection than those who got a placebo shot.

Shares in the company, based in Brisbane, California, closed down $6.16 or 47.31 percent at $6.86 on Monday.

LITTLE INFORMATION TO WORK WITH

There were only 498 blacks and Asians and ``others'' in the trial, so the numbers are difficult to interpret. Of all 5,000 volunteers only 127 became infected with HIV -- only 25 among the blacks and Asians -- which is a small number of cases to draw any conclusions from.

``The company is claiming that this vaccine works better in African Americans and other non-Hispanic racial subgroups based on a difference of five people,'' Martin Delaney of AIDS information group Project Inform said in a statement.

``This is at best premature and irresponsible data reporting.''

``VaxGen has not proven that this vaccine is effective among African Americans or Asians, yet preliminary press reports are claiming that this may be the case,'' agreed Ana Oliveira, Executive Director of Gay Men's Health Crisis.

But the company said blacks and Asians seemed to produce more antibodies against the virus than others. It will be worth was examining these patients see if they could provide clues to improve the vaccine, said Dr. Neil Flynn of the University of California Davis, who worked on the trial and helped interpret the results.

``I think personally that there is enough here to warrant a lot more study, particularly in people of African American descent,'' Flynn said in a telephone interview.

One thing the company and the U.S. Food and Drug Administration were looking for was evidence the vaccine could act therapeutically -- to help reduce the devastating effects the virus has on the immune system.

AIDS kills patients by destroying their immune systems, leaving them vulnerable to other infections.

Flynn said there was some suggestion the vaccine might reduce how much virus is in the blood. ``The tendency that many of us noticed at the clinical end was that their viral load setpoint was lower than what we are used to,'' he said.

ANSWER MAY LIE IN THE GENES

``If the antibody response does turn out to be higher in people of African heritage, the question is why. We can find out what it is and find out a way to effect it in people who don't have it,'' Flynn said.

``This needs to be resolved soon because if this vaccine works in people of African American descent then it needs to be considered to make it available if possible.''

Phill Wilson, Executive Director of the Black AIDS Institute, a Los Angeles-based think tank, agreed.

``AIDS is the number one killer of young black men in the U.S. because the interventions we already have don't reach enough African Americans. With or without an effective vaccine, that has to change,'' Wilson said in a statement.

Francis said it was not immediately clear if the numbers would be enough to satisfy the FDA, which had been looking for at least a 30 percent rate of protection from infection.

``Clearly we will move toward licensure -- the question is whether we will do it with this study,'' he said. He said VaxGen would meet with the FDA to discuss what to do.

Campaigners said the results showed that work must continue to develop an AIDS vaccine. Nineteen different vaccines are in human trials around the world.

``The news on VaxGen's AIDSVAX is disappointing, but we are not discouraged. The search for an AIDS vaccine will and must go on,'' said Dr. Seth Berkley, president of the International AIDS Vaccine Initiative in New York.

Merck & Co. Inc., GlaxoSmithKline Plc, Aventis Pasteur SA, as well as government and nonprofit researchers in the United States, Britain, France, Uganda are all testing AIDS vaccines.

Other researchers have said that stimulating an antibody response using this approach would not be enough to vanquish HIV, which can mutate and evade the body's immune responses.