Looking for a lift after a devastating prostate cancer failure, Bavarian Nordic has secured a U.S. smallpox vaccine stockpiling contract potentially worth $539 million as it transitions to a new freeze-dried formulation.
Under the deal, the U.S. government will pay an initial $100 million to stockpile Bavarian Nordic's smallpox vaccine Imvamune in the new freeze-dried formulation. The company will invest $75 million in its manufacturing to ensure it has the capacity called for in the deal.
It's the third year in a row that BN has secured such a stockpiling deal, totaling $333 million, Bavarian Nordic CEO Paul Chaplin told investors on a conference call.
"I'm extremely happy to announce this contract today," Chaplin said on the call. "I think the value is higher than what many people in the market were anticipating. I think that's in part a sign that the U.S. government appreciates that the freeze-dried (vaccine) is a superior product, will have a longer shelf life and will allow us to build up that larger stockpile which is a requirement for the U.S. government."
The government is planning to stockpile 132 million doses of the smallpox vaccine, according to BN. The contract's options are worth $439 million and cover fill/finish, regulatory and further development work. In its statement, BN said more stockpiling orders could follow.
So far, the company has secured $772 million in contracts for its freeze-dried Imvamune vaccine, executives said on the conference call. According to BN, the freeze-dried formulation has a shelf life of more than 5 years and can reduce shipping and storage requirements versus the older, liquid-frozen version.
With the new contract in hand, Bavarian Nordic said it intends to invest $75 million on a fill/finish manufacturing line at its plant in Kvistgaard, Denmark. The contract includes an potential option of $33 million to cover process transfer and validation of the new manufacturing line. On the call, Chaplin said he believes the contract options will be awarded and that the U.S. government will submit additional orders to replace expiring doses of the liquid-frozen vaccine in the national stockpile.
For the Danish vaccine specialist, the deal with U.S. authorities is a positive development at the end of a tough month. Two weeks ago, the company's cancer vaccine Prostvac failed a phase 3 prostate cancer trial, sending investors for the doors and devastating shares.
In the wake of that failure, the company highlighted 6-month RSV vaccine data and unveiled a plan for a new challenge study on that shot as it looks to regroup.
The company has long been a partner with U.S. officials on smallpox preparedness and has been advancing its freeze-dried Imvamune formulation in recent years. Since 2003, it has pulled in $1.8 billion in government contracts for smallpox vaccine stockpiling, according to an investor presentation. The U.S. government awarded a $95 million R&D contract for the freeze-dried formulation in 2009.
Contrary to traditional smallpox shots, Imvamune is a nonreplicating vaccine and is designed for immunocompromised individuals.