No Hope for Stockpile of New Anthrax Vaccine by November

"There should be a sense of expediency and urgency to get these products developed and stockpiled," said Richard B. Hollis, head of Hollis-Eden Pharmaceuticals Inc., a San Diego company that has spent more than $70 million developing a treatment that would be used after a nuclear or radiological explosion. His company has been hammered in the stock market by perceived delays in the government's plans to purchase the drug.

William Hall, an HHS spokesman, said that the government is aware of companies' complaints and is trying to move rapidly but that it also has to take great care in analyzing potential terrorist threats and deciding which treatments and antidotes are worth the taxpayers' money. BioShield's funding "is not a bottomless pit," he said.

Supported by government contracts totaling close to $1 billion, the VaxGen program is a showcase of how BioShield is supposed to work. VaxGen is assigned to produce 75 million doses of vaccine, enough to treat 25 million people after an attack -- roughly equivalent to the entire populations of the Washington and New York metropolitan areas.

That stockpile was originally supposed to be in place by next year. But at the current rate it will be completed no sooner than 2008 or 2009, long after the anthrax attacks of late 2001 prompted the government to promise a better defense.

VaxGen, despite a troubled financial history, has managed to raise $148 million based on its anthrax contracts. It has built a $20 million production facility in South San Francisco, Calif., has hired a staff of 300 and is producing test lots of anthrax vaccine. Money shortages don't appear to have played any role in the recent problems with the vaccine.

But the company's finances are still wobbly, and with at least a year's delay looming before the vaccine is ready, VaxGen's ability to survive long enough to fulfill its contract with the government remains in doubt.

"The so-called Valley of Death is long and hot," said Lance Ignon, VaxGen's vice president for corporate affairs. "How we emerge will be very important -- it will send a strong signal to the rest of the industry."

Efforts are afoot on Capitol Hill to solve the financing problem by creating a biodefense agency with greater contracting powers than HHS. But the proposal has been criticized across the political spectrum because the agency would be exempt from open-government requirements.

VaxGen has been signaling problems in its vaccine program to Wall Street for many months and disclosed in early November that a year's delay was likely, sending its stock plunging 33 percent. But the scientific details of its problems were unclear before now.

In interviews recently in South San Francisco, VaxGen officers laid out the trouble in detail. They refused to release copies of data from the key human trial that their vaccine flunked, saying the material has not been fully reviewed by the government, but they showed the data to a reporter.

The test, completed last year, revealed an unexpected problem with the strength of the vaccine. Analysis eventually revealed that the vaccine was unstable -- any given batch was losing potency within months. That is a potentially disastrous problem, since the whole point of the vaccine is to sit on a shelf for years, ready for use the moment anthrax is unleashed.

Once they understood it, the VaxGen scientists said, the problem was easy to solve by adding an ingredient. But they can't be certain that fix has worked until they run additional tests, including a human test scheduled to begin later this year. HHS declined to comment on the problem but said VaxGen was required to deliver a product of acceptable stability to the government.

Hall, the HHS spokesman, noted that the government also encountered delays several years ago when it sought to stockpile smallpox vaccine but eventually solved them and acquired enough for every American.

Even when the shelf-life problem is solved, the anthrax vaccine will still be something of an unknown quantity. VaxGen licensed the vaccine from the U.S. Army, which invented it at a laboratory in Frederick, and Army tests show it should work. But naturally occurring anthrax infection is rare, so a new vaccine can't be tested for effectiveness in people. The Food and Drug Administration will have to approve it based on a combination of safety tests in people and effectiveness tests in animals.

With the new vaccine delayed, HHS is stockpiling an older vaccine made by a subsidiary of Emergent Biosolutions Inc., a Gaithersburg company. That vaccine has a checkered history, including lot-to-lot variability and a tendency to cause sore arms and perhaps more serious reactions. Some U.S. soldiers have risked court martial rather than take the vaccine.

If a large anthrax attack happened tomorrow, that vaccine plus antibiotics would be the defenses the government would have to offer people who had been exposed but weren't yet ill. When the same vaccine was offered in 2001 to people potentially exposed to letters containing anthrax spores, many Capitol Hill aides took it, but most postal workers refused, preferring to take their chances using antibiotics alone.