Emergent BioSolutions acquires advanced anthrax vaccine candidate, technology

ROCKVILLE, Md. — Emergent BioSolutions Inc. announced May 5, 2008, that it has completed the acquisition of all assets and rights related to a recombinant protective antigen (rPA) anthrax vaccine product candidate and related technology from VaxGen Inc.

Recent improvements to the rPA vaccine, specifically related to stability, suggest that it is well positioned to be a leading candidate for an award under a request for proposal recently issued by the U.S. Department of Health and Human Services.

The vaccine candidate has completed one Phase 2 clinical study. This proposal is designed to meet the government’s stated goal to procure 25 million doses of an rPA anthrax vaccine for the Strategic National Stockpile. HHS has indicated that any awards under its proposal request are scheduled to be granted in late 2008.

The acquisition of this rPA vaccine candidate, and the pending request for proposal, have no effect on Emergent BioSolutions’ $448 million contract with HHS for the delivery of 18.75 million doses of BioThrax, the only FDA approved vaccine for the prevention of anthrax disease, into the national stockpile.

Emergent BioSolutions continues to manufacture and deliver doses of BioThrax in accordance with this multi-year agreement.

The company intends to manufacture this new rPA anthrax vaccine, as well as BioThrax, in its recently constructed, large-scale manufacturing facility at its campus in Lansing, Mich.

“As the manufacturer of the only FDA approved anthrax vaccine, Emergent BioSolutions has a proven track record of delivering critical biodefense countermeasures to the U.S. government. Given HHS’ stated commitment to procure up to an additional 25 million doses of a recombinant anthrax vaccine for the Strategic National Stockpile, we felt this was the right opportunity for our company at the right time,” said Fuad El-Hibri, chairman and CEO of Emergent BioSolutions.

“Additionally, we are pleased to provide the U.S. government with the important option to select an advanced rPA anthrax vaccine candidate from a domestic manufacturer. As the premiere domestic biodefense supplier, this was a natural fit for us.”

The vaccine candidate, rPA 102, is based on a recombinant form of the protective antigen protein. This vaccine contains a purified protein (rPA) formulated with an alum adjuvant and is designed to induce antibodies that neutralize anthrax toxins.

The vaccine candidate does not cause anthrax infection and is based on the work of the U.S. Army Medical Research Institute of Infectious Diseases. RPA 102 has been the subject of two research and development grants totaling approximately $100 million from the National Institute for Allergy and Infectious Diseases.

In 2004, HHS awarded VaxGen an $877 million contract for delivery of 75 million doses of rPA 102. The contract was subsequently terminated by HHS, based on its determination that VaxGen failed to cure the condition endangering performance and failed to meet a milestone imposed by HHS that required VaxGen to initiate a clinical trial of the vaccine candidate by Dec. 18, 2006. This failure was primarily related to stability issues with the vaccine.

Data reviewed to date relating to the rPA vaccine candidate suggests that the steps taken to address a prior stability issue affecting the vaccine position the product for continued development toward regulatory approval and to be a leading candidate for the HHS procurement contract of 25 million doses under the recently issued request for proposal.

Under the terms of the asset acquisition, Emergent BioSolutions paid VaxGen $2 million upon execution of the definitive agreement and may be obligated to pay up to an additional $8 million in milestone payments, plus specified percentages of future net sales.

Emergent BioSolutions is a biopharmaceutical company focused on the development, manufacture and commercialization of vaccines and therapeutics. Its development pipeline includes programs focused on anthrax, botulism, tuberculosis, typhoid, hepatitis B and Chlamydia.