US issues $1 billion in flu vaccine contracts

US issues $1 billion in flu vaccine contracts
Thu May 4, 2006 12:00 PM ET


By Lisa Richwine and Maggie Fox

WASHINGTON (Reuters) - Five companies received more than $1 billion in
contracts to develop new and better influenza vaccines, and to make
them on
U.S. territory, the U.S. Health and Human Services Department said on
Thursday.

GlaxoSmithKline Plc <GSK.L> <GSK.N> was awarded $274.75 million,
MedImmune
Inc. <MEDI.O> was awarded $169.46 million, Novartis AG <NOVN.VX> won
$220.51
million, DynPort vaccine, working with Baxter International Inc.
<BAX.N>,
won $40.97 million and Solvay <SOLBt.BR> won $298.59 million.

The companies will all work to develop cell-based vaccines to fight
influenza. The new vaccines will be grown in labs, in batches of cells
called cell cultures, Health and Human Services Secretary Mike Leavitt
said.

This new method aims to replace older, egg-based methods which require
steady supplies of carefully grown eggs and months of cultivation.

The targets are both the annual seasonal flu and the H5N1 avian
influenza
spreading among birds. The bird flu virus does not yet easily infect
people
but it has killed more than 100 people and experts fear it could mutate
into
a form that could spread easily and quickly among people.

If it did, it would spark a pandemic and work would have to begin
quickly on
a vaccine to fight it.

"These funds are part of $3.3 billion proposed by the President and
appropriated by Congress to HHS for fiscal year 2006 to help the nation
prepare for a pandemic," HHS said in a statement.

Experts have been urging the United States for years to help companies
develop more modern methods to make influenza vaccines. The current,
40-year-old technology is unwieldy and unreliable and it takes months
to
determine how many vaccine doses will be available in a given year.

And HHS has worried that almost all flu vaccines are made outside the
United
States. If there were a pandemic of influenza, and countries acted to
keep
vaccine supplies for their own citizens, that might mean vaccines would
not
be available to Americans.

Glaxo said it would use some of the money to work on a vaccine plant it
bought in Pennsylvania.

"In addition to the contract work for HHS, GSK will continue to make an
investment in excess of $100 million at its Marietta, Pennsylvania,
facility
to establish a domestic cell culture flu vaccine manufacturing site,"
Britain's Glaxo said in a statement.

Maryland-based MedImmune said it would expand its facilities where it
makes
a needle-free, nasal-spray flu vaccine.

"We plan to expand our domestic manufacturing capacity by establishing
a
cell-based facility in the United States that can produce at least 150
million doses within six months of notification of an influenza
pandemic,"
said David Mott, president and chief executive officer of MedImmune.

"We also plan to initiate our first Phase 1 study against the avian
H5N1
strain this coming June under a cooperative research and development
agreement with the National Institutes of Health to determine if our
technology can be as effective against potential pandemic A strains as
it is
against seasonal A strains of influenza," Mott added.

Daniel Vasella, chairman and chief executive officer of Swiss-based
Novartis, said his company would build new flu vaccine facilities in
the
United States.

"We will be investing additional resources in highly skilled
researchers to
set up one of the first flu cell culture manufacturing sites in the
U.S,"
Vasella said in a statement.

Last year, HHS awarded Sanofi Pasteur <SASY.PA> a $97 million contract
for
development of a cell-based vaccine.

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