BioWorld International Correspondent

Bavarian Nordic A/S will book $100 million in revenues over the next three years from a U.S. National Institute of Allergy and Infectious Diseases contract to supply 500,000 doses of its Imvamune third-generation modified vaccinia Ankara smallpox vaccine.

An option for the delivery of an additional 2.5 million doses would add $41 million to the contract's value. A major portion of the cash will fall due over the next year, said Peter Wulff, CEO of the Copenhagen, Denmark-based company. Bavarian Nordic is due to deliver the 500,000 doses using a validated manufacturing process within 11 months of the contract award. The agreement also includes provisions for ongoing preclinical and clinical testing of the Imvamune modified vaccinia Ankara (MVA) vaccine.

Rival firm Acambis plc, of Cambridge, UK, received a contract valued at $76 million under the same program, RFP2, while the National Institute of Allergy and Infectious Diseases in Bethesda, Md., also has taken out an option for the delivery of an additional 2.5 million doses of Acambis' MVA smallpox vaccine that would be worth $55 million.

Acambis is co-developing its MVA vaccine candidate with Baxter Healthcare Corp., of Deerfield, Ill. The companies received an initial $9.2 million contract in February 2003 for an ongoing Phase I trial of the vaccine and the manufacture of several thousand doses.

Those awards are a prelude to a contest for a much larger contract, RFP3, which is expected to seek a stockpile of 60 million to 75 million doses of MVA smallpox vaccine. Bavarian Nordic recently entered a production partnership with London-based GlaxoSmithKline plc. The request is expected to be issued later this year, with a decision anticipated during the first half of 2005.

Both companies posted modest gains during trading Wednesday. Bavarian Nordic closed at DKK538 (US$89.91) on the Copenhagen Stock Exchange, up DKK13, while Acambis gained 7 pence to close at £3.05 (US$5.53) on the London Stock Exchange.

"It was more or less expected. The jury is still out regarding RFP3 and the position regarding the IP rights," said analyst Rolf Sass S renson at Nordea Securities in Copenhagen. Bavarian Nordic previously asserted that it has a proprietary position in the MVA smallpox arena.

"I'm not going to comment on that," Wulff said Wednesday.

Pitting the two companies against each other ensures competitive product-development efforts, S renson said, but he expects the endgame to play out as a "winner-takes-all" scenario, with the substantive commercial deal going to one company.

"My bet is definitely [on] Bavarian Nordic, from the standpoint that they have a much better partner in GlaxoSmithKline, in terms of production capacity," he said. "They have an IP position, which is not the case with Acambis. And they have a development lead of four years."

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