BioWorld International Correspondent

LONDON - The U.S. government consolidated its two smallpox vaccine contracts with Acambis plc, allowing the company to focus manufacturing and clinical trial resources on a single production and development program and increasing its gross profit margin.

"This is a win-win for the U.S. government and for Acambis," Gordon Baxter, Acambis' chief financial officer, said in a teleconference call last week to discuss the Cambridge-based company's first-quarter financial results. "The government doesn't have to pay for two sets of Phase III trials and the whole process is streamlined from their end and from ours."

Acambis has signed contracts with 10 other governments in 2003, worth $30 million, to supply emergency stocks of smallpox vaccine. CEO John Brown said he expects them to result in further orders once the U.S. contract is fulfilled and the vaccine is approved.

The U.S. order catapulted Acambis to profitability last year, and the company said that merging the contracts will boost its cash reserves to £125 million at the end of 2003, from a previous forecast of £100 million.

Acambis originally agreed to two contracts with the Centers for Disease Control and Prevention in Atlanta for 209 million doses of vaccine. The first, awarded in September 2000 and amended in October 2001, was for 54 million doses of ACAM1000. The second, in November 2001, was for 155 million doses of ACAM2000. Both contracts required separate clinical trial programs, culminating in Phase III trials of both vaccines this year.

Now the CDC has said it will substitute 54 million doses of ACAM1000 with orders for the same amount of ACAM2000. That follows a meeting of the Joint Select Working Group of the National Vaccine Advisory Committee and the Defense Science Board, which considered data from the Phase I trials of both vaccines, showing they have similar safety and immunogenicity profiles. It also has been shown that ACAM1000 and ACAM2000 are genetically identical, despite slightly different manufacturing methods. In addition, significantly greater quantities of ACAM2000 have been produced to date.

Production and clinical trials of ACAM1000 will be ended. "There won't be some abrupt halt on ACAM1000, there will be an orderly wind-down," Brown said. "Trials will be completed and written up."