Smallpox vaccine producer may shut down operations without U.S. order
The company expected the order from the Department of Health and Human Services in June. The vaccine, Imvamune, is specifically for those who are at risk of sever adverse reactions to the regular smallpox vaccine. The initial batch ordered by the U.S. is beginning to lose potency, Bloomberg reports.
Imvamune makes up 95 percent of Bavarian Nordic's revenue, according to Anders Hedegaard, the CEO of the Kvistgaard, Denmark-based biotechnology company. In 2007, the company received a $500 million U.S. health contract for 20 million doses of Imvamune.
"The core of our business is the supplying of the smallpox vaccine," Hedegaard said, Bloomberg reports. "The urgency to take the next step seems not to be that high on the agenda" of the health department, he said, Bloomberg reports.
Bavarian Nordic saw its biggest decline since January this month, falling to 5.1 percent, giving the company a market value of $216 million. It had previously gained 30 percent this year.
"If they do not get the extended order from the U.S. government, which they are expecting, then it'll be a matter of time before they run out of money," Thomas Bowers, an analyst for Danske Bank A/S in Copenhagen, said, Bloomberg reports. "The company could be forced to seek alternatives to secure funding for its ongoing pipeline projects."
Bowers said that the U.S. will renew the order, though he added that the situation highlights the problem of contractors relying on the government for most of their revenue.
The U.S. order came from funding through the federal Project BioShield program, which was created in 2004 to provide money for vaccines that would be used in the event of a bioterrorist attack. Unless Congress acts, this funding will expire in 2013.