Biotechs Race for New Vaccine

Government Bid Calls for Improved Anthrax Shot

Developing a next-generation anthrax vaccine is not for the weak of heart -- or wallet. Just two years ago, a revoked federal contract for a purportedly new and improved vaccine left a California biotech in ruins.

But that hasn't stopped two local companies from entering a high-stakes competition to succeed the unsuccessful contractor. PharmAthene of Annapolis and Emergent BioSolutions of Rockville have each spent millions of dollars to answer the government's latest call to develop and supply a better anthrax vaccine, a genetically modified version that produces robust immunity in fewer shots with lessened side effects. By employing newer vaccine technology, the government aims to eventually replace BioThrax, the first and only anthrax vaccine, licensed in 1970 and now owned by Emergent.

Millions of dollars are at stake under the Bush administration's $5.6 billion Project BioShield, a program established in 2004 to stockpile an emergency reserve of critical drugs to protect Americans from bioterrorism. While this next-generation vaccine contract is subject to available BioShield funds, PharmAthene estimates the new contract could be valued at $350 million to $600 million. Both Emergent and PharmAthene have made substantial investments in developing a new anthrax vaccine, part of their arsenals of biodefense products vying for government money.

Last month, after the Department of Health and Human Services pared down its applicant pool for the new anthrax vaccine, Emergent and PharmAthene were still in the running. The award, or awards split between multiple firms, to supply the Strategic National Stockpile with at least 25 million doses could come in the next few months. In the event of an attack, the winner could be called on to provide millions more doses, said Robin Robinson, director of the HHS Biomedical Advanced Research and Development Agency, which manages Project BioShield.

Creating a new vaccine is costly work. PharmAthene paid $20 million in March for the biodefense unit of British firm Avecia, acquiring its next-generation vaccine SparVax. In addition, it spent $7.1 million on anthrax vaccine research and development in the six months ended June 30.

In May, Emergent purchased rPA 102 from its rival VaxGen for $2 million. The South San Francisco, Calif., biotech had already spent more than $175 million on the vaccine in 2006 when the government canceled its $877.5 million contract for 75 million doses, citing stability problems with the vaccine and missed deadlines. VaxGen began to crumble, and Emergent swooped in to pick up the pieces. In past two quarters, Emergent spent about $13 million on biodefense research and development, with a substantial focus on improving rPA 102's stability.

The government needs a strong vaccine with at least a two-year shelf life to quickly inoculate the entire nation against anthrax in case of a terrorist attack. To build a better vaccine, scientists have reinvented how it's made.

When anthrax spores enter the blood stream, they release three substances: protective antigen, lethal factor and edema factor. Protective antigen binds with the two factors to release two fatal toxins.

BioThrax mainly contains protective antigen, which induces antibodies to combat anthrax toxins, but there are also small traces of other proteins. Side effects associated with BioThrax -- swollen arms, muscle pain, flu-like symptoms, nausea -- are thought to be caused by these extra proteins.

A recombinant, or genetically modified, version such as rPA 102 or SparVax would strip away proteins that don't help produce immunity, scientists say. Engineered cells would produce only the protective antigen, resulting in a purer and likely stronger vaccine, leading to shortened dosage. Scientists say recombinant manufacturing would quickly produce high volumes of consistent vaccine.

But this is a theory that has yet to be tested.

Emergent executives point to studies they say show that BioThrax has no more side effects than other vaccines. Last week HHS extended BioThrax's current $448 million contract to stockpile 18.75 million doses, asking for an additional 14.5 million doses for at least $364 million.