Novavax scores $97M federal vaccine deal
Contract worth up to $179M for Rockville company
Novavax of Rockville scored a significant victory Monday when it won a federal contract worth up to $179 million to continue developing its new vaccines for seasonal and pandemic flu.
The company also announced a licensing deal with a South Korean pharmaceutical company. Novavax stock rose 13.9 percent on the news today.
The federal deal includes $97 million for an initial three years, plus $82 million for an optional two-year period, according to the company and federal officials.
The contract with the Department of Health and Human Services' Office of Biomedical Advanced Research and Development Authority is a "validation of our hard work," CEO Rahul Singhvi said in a conference call with investors today.
Publicly traded Novavax is developing the vaccines based on its virus-like particle technology. The technology mimics the external structure of viruses but lacks the live genetic material that actually causes viral replication and infection. Besides being safer than conventional vaccines, according to the company, its vaccines can be produced more quickly.
The technology is "faster and more efficient than the 50-year-old approach to using chicken eggs," Singhvi said. The U.S. currently has "bottlenecks" in its capacity to respond quickly to flu outbreaks.
The federal health agency also awarded a separate vaccine-development contract to VaxInnate of Cranbury, N.J., for up to $196.6 million for up to five years.
"The 2009 H1N1 pandemic demonstrated the need for technologies that can provide vaccines more rapidly," Health and Human Services Secretary Kathleen Sebelius said in a statement. "These next-generation flu vaccines hold the potential to be even more effective and to make the first and last doses of vaccine available sooner than existing flu vaccines by weeks and months which can save more lives during a pandemic as well as during seasonal flu outbreaks."
The initial round of money will help Novavax conduct three clinical trials of its pandemic flu vaccine, plus a phase 2 dose-ranging trial and phase 3 registration trial of its seasonal flu vaccine. The company expects to apply to the Food and Drug Administration for marketing approval of its seasonal flu vaccine in 2014.
Most recently, the company reported last month that its pandemic flu vaccine candidate exceeded immunogenicity criteria at all dose levels in a phase 2 clinical trial involving more than 3,000 subjects in Mexico.
The federal contract also calls for the company to develop a plan for a manufacturing facility that can produce a finished vaccine with 12 weeks of a pandemic flu declaration, ramping up to at least 50 million doses within six months of such a declaration.
The optional $82 million would support manufacturing scale-up and licensing by the FDA.
"We are thrilled to work with BARDA to accelerate the development of a recombinant influenza vaccine solution and help the U.S. government prepare for potential influenza pandemics," Singhvi said in the statement. "This is a unique opportunity for our company to apply the knowledge we have gained over the past five years to address a critical public health need. ... This is a particularly satisfying day for all employees at Novavax to see the fruits of their labor over the past five years go toward such an important cause."
"Making vaccines available faster and to more people is important to our health, and this development will also contribute to jobs of the future," U.S. Sen. Barbara A. Mikulski (D) of Baltimore said in the statement.
South Korean licensing deal
Novavax on Monday also announced a new licensing deal for its vaccine technology with LG Life Sciences. The South Korean company is buying exclusive rights to manufacture, develop and commercialize influenza vaccines using Novavax's technology, according to a Novavax statement.
The deal also includes a non-exclusive license to manufacture, develop and commercialize the vaccines in certain emerging market countries.
The Seoul company is responsible for funding clinical development and licensing of the vaccines in South Korea and the other nations, and for building a vaccine plant on its campus capable of producing up to 30 million doses annually. The Korean market alone represents about 15 million doses annually, Novavax officials said.
Novavax will receive undisclosed upfront and milestone payments, plus sales royalties of at least 10 percent.
"This new partnership ... is further validation of our [virus-like particle] technology and, as we have done previously with our joint venture in India with Cadila Pharmaceuticals, further expands our development efforts into new territories," Singhvi said in the statement.
As a result of the federal and Korean contracts, "We are much stronger and more competitive today," Singhvi said in this morning's conference call, calling the deals "validation from both the public and private sectors."
In its most recent earnings report, Novavax reported its third-quarter net loss widened to $10.4 million from $7.5 million in the prior-year quarter. Revenues fell to $175,000 from $201,000.