In what could be a sign of good things to come for Emergent BioSolutions ($EBS), a U.S. agency Friday inked a hefty contract worth up to $1.6 billion for the biotech to continue developing and eventually produce its new-and-improved anthrax vaccine for stockpiling.
Over a 5-year base period, Gaithersburg, MD’s Emergent will develop NuThrax for post-exposure prophylaxis of anthrax. Following an anticipated FDA emergency use authorization, it would deliver two million doses to the national stockpile. The base value of the contract with the Biomedical Advanced Research and Development Authority (BARDA) is worth $200 million.
Expectations are that the FDA could authorize the vaccine for emergency use in 2018, with stockpile shipments to begin the year after, the company said in a statement.
Should they be needed, the contract includes “procurement options” for an additional 7.5 million to 50 million doses at a value of $255 million to $1.4 billion, according to the statement. In a note to clients, Wells Fargo’s David Maris said on the high end, the deal represents a price per dose of $28, “which is above our expectation for $25 per dose.”
“We see the award and announcement today as a confirmation of our expectations, and good execution by EBS when needed,” Maris wrote. “Finally, we see this as a confirmation that the U.S. government has not shifted its priority for biodefense of anthrax countermeasures, as some had feared.”
Last March, BARDA inked a $31 million deal with Emergent for late-stage development of the vaccine, which has been supported in early phases by the NIH and the Department of Defense.
BioThrax, the company’s current FDA-approved vaccine, has been stockpiled under a 5-year contract signed in 2011 worth up to $1.3 billion. That deal, “which is better than we had expected,” is set to wrap up, Maris said, and the company has indicated that it’s negotiating a follow-on arrangement for BioThrax as it advances NuThrax through the clinic.
NuThrax--which combines the older vaccine with the immunostimulatory oligodeoxynucleotide compound CPG 7909--will require two doses to confer immunity rather than BioThrax's three. So far, the company has received $127 million for its development through 5 government grants.
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