BioReliance gets a share of smallpox vaccine order

Firm to help develop 155 million doses

stock price up 9.94%

November 30, 2001|By Julie Bell | Julie Bell,SUN STAFF

Shares of BioReliance Corp. gained nearly 10 percent yesterday on news that the contract manufacturer will help develop and test 155 million doses of smallpox vaccine that the federal government has ordered to protect U.S. civilians in case of a bioterrorist attack.

Shares of the Rockville-based company rose $2.59 yesterday to close at $28.64 on the Nasdaq stock market.

BioReliance, which already manufactures smallpox vaccine under two contracts, is a subcontractor on the latest order, which Health and Human Services Secretary Tommy G. Thompson announced Wednesday.

The government awarded Acambis Inc. of Cambridge, Mass., the $428 million contract. Subcontractor Baxter International Inc. will manufacture the vaccine in Austria and ship it to Massachusetts, where Acambis will purify it and package it.

BioReliance will help set up the banks of cells from which the vaccine will be made, then test lots at various steps in the process to ensure that they contain no contaminants and are biologically active.

The 155 million doses, when added to 54 million doses previously ordered and 15.4 million stockpiled doses that are scheduled to be diluted to create more, should bring the nation's stockpile of smallpox vaccine to 286 million doses by the end of next year - enough to protect every U.S. citizen, the government said.

The subcontract is an example of how the September terrorist attacks have resulted in increased business for some industries as the government and private businesses react to fears of additional attacks.

The government has taken the unusual step of buying all the vaccine at once, even before it has been tested in people, in a move to ensure it gets the vaccine against the deadly disease stockpiled as quickly as possible.

Testing and a Food and Drug Administration review will be done "in parallel" with manufacturing in this case, BioReliance Chief Executive Officer Capers McDonald said.

While BioReliance cannot say exactly how much the subcontract will mean to it, Chief Financial Officer John Coker said the company - which reported revenue of $18.6 million in the quarter that ended Sept. 30 - expects revenue from the subcontract to be in the millions of dollars. It also may spawn other orders.

"It could be a much larger number over time than it will turn out to be next year," Coker said. "This is something Acambis believes can grow beyond this to sales to other countries."

BioReliance already had a contract with Acambis, announced in September 2000, to help test, develop and manufacture 40 million doses of smallpox vaccine by 2004. That contract was expanded in the wake of September's attacks to 54 million doses, and the time frame for its completion was moved up to late next year.

The military also is speeding up the time frame in which it wants smallpox vaccine made and tested. DynPort Vaccine Co. of Frederick was awarded a $320 million government contract in 1997 to help develop 17 different biological-defense vaccines over 10 years, including a smallpox vaccine, DynPort President Terry Irgens said.

The company, which contracts with BioReliance for all of its smallpox vaccine manufacturing, initially was asked by the Department of Defense to produce 300,000 doses of the vaccine for early clinical trials to begin in May next year.

Now, those human tests of the vaccine's safety have been moved up to January, and Irgens said the government has asked DynPort to produce 12 million doses by September 2003.

"We're making these at BioReliance," Irgens said.

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