Biotechs Get Rival Deals To Build Anthrax Vaccine

29 Sep 2008 • by Natalie Aster

The race to develop and supply the government with anthrax-fighting drugs just got more heated.

Two rival biotechs -- Emergent BioSolutions of Rockville and PharmAthene of Annapolis -- announced yesterday that they received separate federal development contracts to build new anthrax vaccines.

Emergent is currently the government's sole supplier of anthrax vaccine under a $448 million contract to stockpile 18.75 million doses of BioThrax. But BioThrax requires six injections over 18 months to produce immunity and inoculated soldiers have reported serious side effects.

So the government is looking for better vaccine technology.

The National Institute of Allergy and Infectious Diseases, along with the Biomedical Advanced Research and Development Authority (BARDA), awarded Emergent up to $29.7 million to develop an improved form of BioThrax that requires fewer injections but still needs to be refrigerated.

The institute also awarded PharmAthene up to $83.9 million to create a genetically modified anthrax vaccine that can be stored at room temperature and induce immunity in just one or two doses.

PharmAthene's stock increased 4.5 percent, closing at $1.86. Emergent's stock closed at $14.65, jumping about 3 percent.

Both companies are competing to supply the Strategic National Stockpile with 25 million doses of a recombinant, or genetically engineered, anthrax vaccine. A recombinant version is supposed to stimulate immunity faster, with fewer side effects, but would still need to be kept cold. The Department of Health and Human Services plans to award the contract, or multiple contracts, this fall.

Meanwhile, PharmAthene and Emergent have been enhancing their respective anthrax franchises by creating new vaccines and therapies to treat people who have been exposed to anthrax spores.

PharmAthene's $83.9 million award is a big win, said Stephen G. Brozak, president of WBB Securities, a San Diego-based investment and research firm.

"This was obviously more important to PharmAthene than it was to Emergent," he said. "When you don't have revenue, any kind of positive news has a disproportionate effect. People automatically assumed Emergent was going to get it. People weren't sure about PharmAthene."

The awards coincide with BARDA Industry Day in Arlington, where government and business leaders gathered to discuss biodefense and public health issues.

And it's a sign that health officials are learning from their past mistakes, Brozak said. Two years ago, when VaxGen, a South San Francisco, Calif., biotech, lost its federal contract to develop and supply a recombinant anthrax vaccine, the government didn't have a backup.

"Now they're diversifying their purchasing," Brozak said.