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Patch Could Stretch the Supply of Flu Vaccine

By Michael S. Rosenwald
Washington Post Staff Writer
Monday, January 22, 2007

Executives at Iomai Corp. see the future of flu vaccinations like this: A small patch containing the vaccine, along with stimulants to make it more potent, is mailed to patients who stick the patch to their arms for a few hours, then toss it in the trash.

It is a far off but potentially paradigm-shifting approach to vaccination, and last week federal health officials gave their strongest indication yet that Iomai's patch technology has broad public-health possibilities. To stretch the vaccine supply for pandemic flu should an outbreak occur, the Department of Health and Human Services awarded the Gaithersburg company, founded in 1997, a contract worth as much as $128 million to develop both the patch and the immune-system stimulant it contains.

Vaccinations work by setting off an immune response, creating antibodies to fight disease. If Iomai's patch stimulates a stronger immune response, the government theoretically could use smaller amounts of a vaccine for each person, because a small dose would provoke a reaction equal to a full dose. That would allow more people to be vaccinated.

"It is a very interesting technology," said Anthony S. Fauci, director of the National Institute of Allergy and Infectious Diseases. "If it works."

Drug giants Novartis and GlaxoSmithKline were also awarded contracts under the government's program to stretch vaccine supply using stimulants added to pandemic-flu shots. News of Iomai's contract last Wednesday sent the company's stock up 15 percent, to $5.88 a share, though it has come down slightly since then, closing at $5.73 on Friday.

Analysts said the contract attracted attention from investors who had overlooked the company since it went public last February at $7 a share, and had little news to report until now.

"This caught on to investors' radars," said Angela Larson, an analyst with Susquehanna Financial Group, which has had banking relationships with Iomai. The contract "is a third-party validation to their approach to vaccination," she said.

David Webber, an analyst for First Albany Capital, which has banking business with the company, said: "For investors, it's certainly important because absent other events it's the only way that investors can tell if this company is likely to achieve its goals."

Iomai has been developing patches since 1998, after company co-founder Gregory Glenn, then a researcher at Walter Reed Army Institute of Research, published a paper on the technology's potential in the science journal Nature. The patches contain potent immune stimulants, called adjuvants, that travel into the skin to cells that are a major part of the immune system. Those cells are then activated by the stimulants and travel with the vaccine to lymph nodes where the immune response occurs.

Iomai, which has 116 employees, has four areas of development with the patches: to prevent traveler's diarrhea, to boost the flu-vaccine response in the elderly, to extend the pandemic vaccine supply, and finally, perhaps the holy grail, for use as a seasonal flu vaccination in a market that could reach more than 100 million people.

The diarrhea-prevention product is in late-stage human testing, but the others are in the relatively early stages. For the pandemic flu product, the government initially awarded Iomai $14.4 million for early human testing. The company could get $114 million more upon successful completion of those tests.

Stanley C. Erck, Iomai's chief executive, said the company is seeking a partnership with a major drug company for its seasonal flu vaccination, since that market requires both a large sales force and the ability to produce new vaccine components every year.

One intriguing possibility that Erck did not rule out is a partnership with MedImmune, the Gaithersburg company that makes the nasal-spray vaccine FluMist, the only needle-free flu vaccine. MedImmune's venture-capital group has invested in Iomai and owns 5.3 percent of the company. Iomai's chairman is M. James Barrett, whose venture-capital firm New Enterprise Associates is Iomai's largest shareholder. Barrett is also on MedImmune's board.

Erck said MedImmune is "one of the vaccine players that could possibly have an interest in this program." Novartis, GlaxoSmithKline, and Sanofi Pasteur also sell flu vaccine in the United States.

Jamie Lacey, a spokeswoman for MedImmune, said the company does not comment on third-party discussions unless it has a disclosure obligation under federal regulations. "MedImmune Ventures has invested in Iomai and we congratulate them on receiving the HHS contract," she said.

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