Danish vaccine maker Bavarian Nordic A/S said the Department of Health and Human Services wants to buy 20 million doses of Imvamune, its third-generation smallpox vaccine, for the strategic national stockpile.

It's the first potential contract award under the U.S. government's RFP-3, a request for proposals for 20 million doses of a modified vaccinia ankara-based vaccine for smallpox, and came five months after Bavarian Nordic's chief competitor, Acambis plc, learned that its third-generation compound, MVA3000, was no longer in the running for an RFP-3 award. (See BioWorld Today, Nov. 15, 2006.)

While Bavarian Nordic still is negotiating the terms of the agreement, the company, in its prospectus, has projected the deal's value at up to DKK3 billion (US$500 million). The agreement also includes an option for the company to provide up to 60 million additional doses, said Elizabeth Dempsey Becker, spokeswoman for Bavarian Nordic.

Prior to the RFP-3, the company received a $100 million-plus contract under the RFP-2 program from the National Institute of Allergy and Infectious Diseases in 2004 to supply 500,000 doses of Imvamune over a three-year period, with an option for an additional 2.5 million doses. A much larger contract, the RFP-3 seeks an MVA smallpox vaccine that, in the event of an outbreak, could treat healthy subjects, as well as patients who are immunocompromised and for whom existing smallpox vaccines are contraindicated.

In testing to date, Imvamune, which is based on a live, nonreplicating strain of the MVA virus - and therefore, does not proliferate in the body or cause post-vaccination complications - has been found to be safe and well tolerated in healthy volunteers "and in people with HIV and atopic dermatitis," Becker said. "We've got 10 completed or ongoing studies," she told BioWorld Today, and the vaccine "has been tested in more than 1,500 people."

Imvamune is in Phase II development. Bavarian Nordic anticipates an end-of-Phase-II meeting with the FDA later this year, with Phase III trials expected to begin in 2008.

The company's shares, listed on the Copenhagen Stock Exchange (BAVA), gained DKK41, or 7 percent, Monday to close at DKK573.

Up until Acambis learned its third-generation vaccine would not be considered under the RFP-3, the two companies had been running neck and neck to land government contracts for their smallpox vaccines. Like Bavarian Nordic, Cambridge, UK-based Acambis was awarded a contract under the RFP-2 program in 2004, and that contract was valued at about $76 million, with an estimated $55 million option for an additional 2.5 million doses. When rejecting Acambis' RFP-3 proposal, the HHS did not provide any details explaining its decision. (See BioWorld Today, Oct. 1, 2004.)

The rival firms also are in the midst of an ongoing patent infringement lawsuit regarding the MVA-based smallpox vaccines. In February 2006, Bavarian Nordic filed action in an Austrian court, alleging that Acambis' MVA3000 infringed on its MVA patents. An administrative law judge with the U.S. International Trade Commission (ITC) in September ruled that Acambis was infringing two of Bavarian Nordic's patents but determined that those patents were invalid. Bavarian Nordic filed a petition for a review, and, earlier this year, the judge's order was vacated. The case will be heard before the ITC again later this year.

Since its first award for Imvamune, Bavarian Nordic has invested much of its own funds to further the program. Imvamune was partnered with London-based GlaxoSmithKline for production and marketing, as per a 2004 agreement. But after opening its own commercial manufacturing facility that's capable of producing a minimum of 40 million doses per year, the Kvistgard, Denmark-based firm agreed with GSK to terminate the deal.

Elsewhere in its pipeline, Bavarian Nordic is working on vaccines using its MVA-BN vaccine vector technology, including MVA HIV Nef, which is based on a recombinant MVA vaccine expressing the HIV Nef protein. That product, designed to slow disease progression in HIV-infected patients, is in Phase II testing. Other programs include MVA-BN polytope, which is in Phase I in HIV-infected patients, and several early stage programs in cancer, measles, respiratory syncytial virus, Japanese encephalitis and dengue fever.

The company recently raised gross proceeds of $83 million from a rights offering of 1.3 million shares, to boost its cash position and fund manufacturing activities related to Imvamune and advance other pipeline products. (See BioWorld Today, March 29, 2007.)

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