VaxGen sells anthrax vaccine to rival firm

May 7, 2008 (CIDRAP News) – VaxGen Inc. announced this week the sale of its experimental anthrax vaccine—which the US government pulled the plug on in 2006—to Emergent BioSolutions, maker of the only US-licensed anthrax vaccine.

VaxGen, of South San Francisco, Calif., said it sold the vaccine and related technology to Emergent, based in Rockville, Md., for $2 million. Emergent may be required to pay up to an additional $8 million in milestone payments, plus a percentage of any future sales revenues.

The Department of Health and Human Services (HHS) awarded VaxGen an $877 million contract in 2004 to produce 75 million doses of its second-generation anthrax vaccine for the Strategic National Stockpile. But HHS canceled the contract in December 2006, after problems with the vaccine's stability caused the company to miss a deadline for starting a clinical trial.

VaxGen's contract was the first awarded under Project BioShield, a $5.6 billion program to procure medical defenses against the effects of chemical, biological, radiological, and nuclear weapons. The aim of the contract was to provide a vaccine that requires fewer doses than the existing vaccine and has minimal side effects.

The Los Angeles Times reported last December that a lobbying campaign by Emergent had been a factor in the HHS decision to cancel the VaxGen contract. Emergent has a second-generation anthrax vaccine candidate of its own, called rPA 102. Like VaxGen's vaccine, its active ingredient is a recombinant form of protective antigen (rPA), an anthrax protein.

In a news release announcing the sale, VaxGen President James P. Panek said, "In Emergent, we believe we have identified a partner whose expertise in the field and track record in contracting with government agencies maximizes the chances of returns for our shareholders."

Emergent, in a release announcing its purchase, said the VaxGen vaccine's stability has been improved and that a phase 2 clinical trial has been completed. The vaccine could be a leading candidate for a new HHS contract to supply anthrax vaccine for the national stockpile, the company said. The firm said plans call for making the vaccine at Emergent's new facility in Lansing, Mich. HHS issued a request in February for proposals to provide 25 million doses of anthrax rPA vaccine, according to previous reports.

Emergent produces BioThrax—also known as Anthrax Vaccine Adsorbed—the licensed anthrax vaccine, developed in the 1950s. The product, which is required for US military personnel serving in high-risk areas such as the Middle East, is given in six doses over 18 months, followed by an annual booster. A number of service members have complained of serious side effects from the vaccine, and it was the subject of a long court battle after some sued to stop the program.

Last September, Emergent won an HHS contract worth up to $448 million to supply 18.75 million doses of BioThrax to HHS for the national stockpile. The company said its acquisition of the VaxGen vaccine will have no effect on the existing contract.

A May 5 report in the Washington Post said Emergent's rPA 102 anthrax vaccine isn't as far along in development as the VaxGen product. Facing a deadline to submit a proposal to HHS by the end of this month, Emergent decided to bet on the VaxGen vaccine, the story said.

VaxGen spent more than $175 million to develop the vaccine, the Post reported. The story said the company laid off three quarters of its remaining 22 employees last month.

Emergent is unlikely to be the only company bidding for the new HHS anthrax vaccine contract. Last month, PharmAthene, an Annapolis, Md., company, announced it had acquired the biodefense business of the British firm Avecia, including the rights to an rPA anthrax vaccine that has gone through phase 2 clinical trials.

See also:

May 5 VaxGen news release

May 5 Emergent news release
http://investors.emergentbiosolutions.com/phoenix.zhtml?c=202582&p=irol-newsArticle&ID=1139336

Dec 3, 2007, CIDRAP News story "Newspaper says lobbying helped sink anthrax vaccine"

Dec 20, 2006, CIDRAP News story "HHS cancels VaxGen anthrax vaccine contract"

Apr 8 CIDRAP News story "DoD funds development of anthrax vaccine patch

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