First of all, a caveat. The following story is compiled mostly from information available in the public domain, and I have included links and quotes wherever they are available. There are, however, a few remarks from sources that will only speak on condition of anonymity. This kind of information is hard to verify. I debated whether to write about this. On balance, I believe the gist of the story is accurate, and that the issue IS of substantive public interest. If anyone has any further information that can verify or discount any points I made, I'd be grateful to either have the information be confirmed, or stand corrected! ;-) Thank you!
Conflicts of interest: None.
The recombinant haemagglutinin or rHA vaccine FluBlok, developed by Protein Sciences (PSC), a CT-based small company, is probably one of the most promising pandemic vaccine candidates, for the many reasons that I wrote about more than a year ago here. Before I get to the latest happenings, let me re-cap what has happened since that diary.
In April 2007, the results of phase 3 clinical trials for seasonal flu were published in JAMA (free) Safety and immunogenicity of a baculovirus-expressed hemagglutinin influenza vaccine: a randomized controlled trial, giving even more reasons to feel encouraged about both the efficacy and safety of this vaccine, especially the fact that increasing the antigen dose increases efficacy without increasing adverse reactions apart from local pain. Since the potential production capacity is enormous, this means that in a pandemic, we may be able to simply use higher antigen doses without necessarily having to depend on the use of adjuvants or other dose-sparing strategies. And that is in addition to having the vaccine be available from 12 weeks into a pandemic instead of 6 months...
Apparently, BARDA/HHS holds similarly positive views about this recombinant vaccine, as shown by the prominent role it is supposed to play to mitigate a pandemic, in this slide used frequently by BARDA Director Robin Robinson since early 2008.
Interestingly, this rHA vaccine was actually the first H5N1 vaccine to be made for human use, in 1998, against the Hong Kong virus, at the request of NIH. Note that the time from 'urgent call from NIH' to vaccine delivery was only 8 weeks! However, since then, PSC has not received any government funding for further clinical trials. More on that later.
Now, developing a vaccine is not for the faint-hearted, as you can see from this slide, presented by Bob Kadlec from the WH, a while back.
A successful vaccine can only become available on the market if the company is able to find some means of tying over the 'valley of death', that long dry spell between early development and final licensure. It is even more problematic for small companies that do not yet have a product on the market bringing in revenue, as is the case with PSC. Bills have to be paid, labs have to be maintained, while the process goes through the labyrinth of government. Quite frankly, the bottomline is, people can't live on thin air while government takes its time!
Various senior officials from BARDA, HHS, WH, etc have reiterated many times, how they are aware of the issue, and that "the federal government finally gets it", that they ain't gonna get any vaccine unless they can streamline their bureaucratic processes to help fund late-stage development for promising products, so that companies and products do not, literally, die a premature death.
The question is, can they live up to their rhetoric?
As I said earlier, the seasonal flu version of FluBlok completed clinical trials last year, and a BLA or Biologics License Applications was filed with the FDA, I believe in April 2007 2008. That is the final step towards licensure. This is now December 2008, 20 8 months later. The company is still waiting for final approval, despite this early report from Bloomberg in Aug 2007, that The Food and Drug Administration has offered the company an expedited, six-month review of its application, a process that usually takes a year.
I have no information as to the reason for the delay, but let's look at the even more important piece, getting federal grants to develop the pandemic vaccine. In August of 07, BARDA/HHS put out a Request for Proposal (RFP):
The U. S. Department of Health and Human Services, through the Office of the Assistant Secretary for Preparedness and Response, contemplates single or multiple contract awards to develop recombinant influenza vaccines based on hemagglutinin genes or proteins (plasmid DNA, virus-vectors, peptides, subunit proteins and virus-like particles) and leading towards FDA-licensure and human usage. The scope of activities for which the Offeror may request funds include clinical investigation lot manufacturing, scale-up process development, clinical evaluation, validation of manufacturing process systems and manufacturing facility concept design but not facility construction.
PSC, along with other companies, submitted their proposal in late 2007. Early indications were optimistic, again from Bloomberg:
Now the U.S. is preparing another round of funding for companies including Protein Sciences and publicly traded Novavax Inc. to develop flu shots using recombinant DNA.
"We were told they could produce a vaccine in less than 12 weeks after the start of a pandemic," Robin Robinson, director of pandemic influenza countermeasures for the Health and Human Services Department, said in a telephone interview.
In the meantime, something else was also happening. As I said, it's difficult for a small company to survive with no funds, so it's only natural that, pending government funds, they had to find the money from somewhere else. An announcement for a potential merger with Emergent Biosolutions, a much bigger company that supplies the US government with the anthrax vaccine, came out in May 2008
Emergent BioSolutions to Acquire Protein Sciences' Phase III Recombinant Flu Vaccine
Tue May 27, 2008 12:01am EDT
ROCKVILLE, Md. & MERIDEN, Conn.--(Business Wire)--
Emergent BioSolutions Inc. (NYSE:EBS) and Protein Sciences Corporation (PSC), based in Meriden, Connecticut, announced today that the two companies have entered into an asset purchase agreement under which Emergent will acquire PSC's ongoing operations, including FluBlok, a Phase III recombinant influenza vaccine candidate, and certain other assets....
...Under the terms of the agreement, Emergent will acquire substantially all assets of PSC,...
...Emergent intends to retain all of the approximately 50 PSC employees and anticipates continuing production of FluBlok in the Meriden, Connecticut facility.Emergent expects to launch out of this location. In parallel, Emergent is evaluating plans for future large-scale manufacturing of FluBlok and is considering Meriden as a site for the facility...
...Terms of Acquisition
Under the terms of the asset purchase agreement, the consideration paid by Emergent will include:
-- Up to $28 million in cash and the assumption of PSC liabilities, including trade payables associated with the Phase III clinical trials of FluBlok;
-- A $20 million, 4.75%, 5-year note, convertible into Emergent common stock at a conversion price of $12.50 per share;
-- Up to $30 million in future payments based on the achievement of FluBlok commercialization milestones and net sales of FluBlok;
-- A percentage of net sales of FluBlok.
The closing of this transaction, anticipated by the end of the second quarter of this year, is subject to the approval of the stockholders of PSC, the receipt of regulatory approvals and the satisfaction of certain conditions of closing.
Unfortunately, the next thing we heard, the merger hit some buffers, and EBS has filed a lawsuit against PSC.
Emergent BioSolutions sues Protein Sciences
July 10, 2008
Emergent BioSolutions Inc. has sued the company it planned to acquire in May, claiming that it was duped into giving a $10 million loan to the company through false claims that a sale would take place -- allegations that the other company calls ridiculous.
Rockville-based Emergent said executives from the other company, Protein Sciences Corp., based in Meriden, Conn., had given assurances that they push forward with board and shareholder approvals on a planned $78 million acquisition -- only to thwart those acquisition efforts after receiving a $10 million bridge loan from Emergent to pay overdue bills.
Claiming unfair business practices, deception and fraud, Emergent is suing Protein Sciences and two of its executives, CEO Daniel Adams and Chief Operating Officer Manon Cox, for $13 millions plus interest, punitive damages and assurances that Protein Sciences does not use the loan money for any other purposes than for which it was designed.
The local company said Adams and Cox, after signing the purchase agreement in late May, disparaged Emergent and the proposed deal to board members, employees, shareholders and members of the public at life sciences conferences; blocked Emergent's access to its internal documents and records and canceled the June 23 shareholder meeting on the very day that the final vote on the sale was to take place.
and PSC issued a press release to counter the claims:
Protein Sciences Responds to Emergent BioSolutions Lawsuit
July 10, 2008
... Those shareholders believed the transaction significantly undervalued PSC. EBS knew that PSC was short more than 10,000,000 votes necessary to approve the transaction and that more than 42% of PSC's shares were prepared to vote against the transaction and that less than 34% of PSC's shares had indicated a willingness to vote in favor of the transaction. Ultimately and after consultation with EBS and their acquiescence, PSC decided to delay the shareholder meeting instead of forcing a vote on the transaction.....
....Following the second proposal, EBS instead suggested that PSC circumvent its shareholders by filing for bankruptcy protection. As part of its bankruptcy strategy, EBS indicated that it was prepared to enter into a sweetened transaction with PSC but essentially at the same purchase price and on the other economic terms as the proposed transaction and have PSC present such sweetened transaction for bankruptcy court approval instead of seeking shareholder approval.
At the end of July, PSC announced the termination of the merger negotiations. Interestingly, their press release gives some indication of their expectations with regards to the HHS processes at the time:
"We remain on track for a decision on our BLA by mid-October, 2008 under the FDA's accelerated approval pathway."...
...PSC also announced that it submitted a proposal for federal funding for a contract to develop recombinant seasonal and pandemic influenza vaccines from the Department of Health and Human Services (BARDA). Negotiations over the contract have been ongoing and a decision may be reached by BARDA within the next few weeks.
Now this could have been wishful thinking, or just spin. OTOH, it would apper that the expectation of an award or awards was shared by many in the industry, including of course EBS. From their original press release:
In addition, late last year, PSC applied for a research and development grant in response to a Biomedical Advanced Research and Development Authority (BARDA) RFP, "Advanced Development of Recombinant Influenza Virus Vaccines." BARDA has indicated its intention to issue one or more awards under this RFP in late 2008.
In any case, all that is moot, since the merger is now abandoned. Whatever the rights and wrongs of this suit, the bottomline is, PSC now has until the end of December 2008, to repay the $10M that it had borrowed from EBS as part of the merger negotiations, or face bankruptcy.
In the meantime, apparently the HHS award process (and possibly the BLA) which was expected to complete in the past few months, has ground to a halt, on the grounds that an award would not be forthcoming until PSC can demonstrate that it is financially viable. Or something to that effect. It didn't matter that the threat of bankruptcy was a result of a lawsuit, or the action of one corporation against another.
OTOH, the last I heard, a federal government audit of PSC has concluded that the company is financially sound IF the RFP money was awarded. If that is the case, it just seems to me this is mind-bogglingly circular logic, to require that a company is financially viable, before you give them the grant that is intended to MAKE them viable, so that they can develop the product to licensure.
Like, excuse me, did I miss something here?
ps It's been TEN YEARS since the rHA H5N1 vaccine was first injected into human subjects as an investigational drug, with great success I might add. If there are scientific reasons for the delay, like adverse reactions and such, well, I haven't seen them. Believe me, I've looked. I can only conclude that something is wrong with the process, of getting the vaccine through the development pipeline.
Hello, is anyone home? HHS? BARDA?
;-( |
