BioWorld International Correspondent
It's officially all over - nearly. Bavarian Nordic A/S is poised to land a contract to supply the U.S. government with a stockpile of 20 million doses of its next-generation smallpox vaccine Imvamune, which is based on the Modified Vaccinia ankara (MVA) viral vector, after a five-year head-to-head slog with Cambridge, UK-based Acambis plc, which dropped out of the race late last year. (See BioWorld International, Nov. 15, 2006.)
Copenhagen, Denmark-based Bavarian Nordic received notification from the U.S. Department of Health and Human Services that the latter body intends to proceed with plans to procure the stockpile under the RFP-3 process that began in 2002. The deal is expected to be worth around DKK3 billion (US$545 million).
"All the important issues in the contract are agreed upon. There are some minor details which will be clarified very soon," said Rolf Sass Sorensen, vice president of communications and investor relations at Bavarian Nordic. The company is reiterating previously issued guidance that the contract would be completed in the current quarter. As yet, however, it is not indicating when precisely it expects to start booking revenues. "When the contract is signed, we will be able to give some more financial details," he said.
The earliest expected date for recognizing revenue is around mid-2008, when the company aims to obtain Emergency Use Authorization (EUA) from the FDA. A Phase II clinical trial in support of the application is ongoing and will be completed in early 2008, Sorensen said. The company plans to begin a pivotal trial of Imvamune early next year as well, and hopes to obtain product registration in 2010, for both healthy individuals and immunocompromised individuals for whom the current smallpox vaccine is unsafe.
Pricing already has been agreed on with the Department of Health and Human Services, although Bavarian Nordic is not disclosing details at this point. Under a previous pilot-scale contract, RFP-2, it received $16 per dose.
"The pricing in this contract was somewhat higher," Sorensen said. Bavarian Nordic also will receive additional milestone payments that will support its product registration efforts for Imvamune. The product has been administered in various clinical trials to 1,500 individuals, he said, and has been demonstrated to be safe and, as far as it is possible to show it, efficacious.
In parallel with their commercial and technological contest, Bavarian Nordic and Acambis also had been engaged in litigation on both sides of the Atlantic. With the principal part of contest now decided, a settlement of the legal dispute appears likely. "There are negotiations, yes. There is contact," Sorensen said. Bavarian Nordic is seeking recognition of its MVA-related intellectual property in any agreement, he said.
Once revenues start to flow from the contract, Bavarian Nordic will be in a position to acquire additional vaccines or technologies that are compatible with its MVA platform, Sorensen said. "M&A activity is definitely on our radar screen."
The contract is a "rubber stamp" for the company and its technology, Annette Rye Larsen, analyst at Gudme Raaschou Bank in Copenhagen, told BioWorld International. Other countries will note that the U.S. authorities have committed to a product that has not yet obtained registration. "They may also make a move," she said.
Canada, indeed, already has done so. Last week, Bavarian Nordic said the Canadian government had issued a request for proposals for a small-scale MVA smallpox vaccines. Other countries also are expressing interest but are doing so more quietly, Sorensen said. The U.S. deal is "a very important catalyst" in that context, he added.
The company's share price rose DKK41 following release of the news on Monday, to close at DKK573.