Acambis plc fell further into the embrace of Sanofi Pasteur, signing a third deal for one of its ChimeriVax vaccines.

That agreement, for a Phase II West Nile virus vaccine, is worth $80 million in up-front and milestone payments tied to development and commercialization of the product in the U.S., plus a "high teens" royalty rate on sales. Acambis will receive $10 million up front, and expects a $5 million contribution to development costs by the end of 2007, while $40 million of the milestone payments are due up to product approval.

Acambis retains responsibility for developing and registering the vaccine, with Sanofi Pasteur, the vaccines arm of Sanofi Aventis SA, picking up all the costs and being responsible for commercialization. If the vaccine is registered in other countries, Acambis will be entitled to further postmarketing milestones.

The Cambridge, UK-based company also is responsible for manufacturing the product.

"We are happy to have a partner who is so well understood, and knows our ChimeriVax platform," Ian Garland, CEO, said in a webcast held to describe the deal.

The product is currently in a Phase II trial in adults ages 41 to 64 and 65 years and older. Preliminary data from a previous Phase II dose-ranging trial in healthy adults have shown that more than 98 percent of subjects seroconverted 28 days after a single vaccination.

Acambis has the most advanced West Nile vaccine in the clinic, and with its new partner, intends to expedite its development to market. As the current infection rates in the U.S. make a field trial impractical, the likely route to approval is a large Phase II safety trial followed by a Phase IV postmarketing study to confirm efficacy.

"We want to do a larger study than we are doing now, because we don't want there to be any safety issues going forward. Then we can monitor afterward to see if [the vaccine] hits the efficacy points," Garland said. The trial is under discussion with the FDA but, according to Garland, it is unlikely an agreement on the final design and subject numbers can be reached before the ongoing Phase II finishes in mid-2008. "It's hard to tie down the FDA while there is an ongoing study," he said.

But "the size of the study will influence how fast the development goes," Garland said. "The fact that we are doing the development validates our capabilities as a vaccines developer."

There is no vaccine for preventing West Nile disease, which is now considered endemic in North America. The U.S. Centers for Disease Control and Prevention (CDC) identified people 50 years and older, a population of more than 87 million in the U.S., as being most at risk for severe disease.

As of Nov. 6, 3,265 cases of West Nile disease and 92 deaths have been recorded by the CDC this year. Since it was first reported in the U.S., there have been 27,000 cases and 1,000 deaths.

Garland noted that the rate of infection is not yet at a level where it would make economic sense to have widespread vaccination, though the cost-benefit profile would shift if infection rates continue to rise. In that case, it may make sense to vaccinate at-risk populations.

Garland also reported that Acambis continues to negotiate a warm base manufacturing contract with the CDC for its smallpox vaccine, which forms the bulk of the U.S. emergency stockpile. The company will give an update on negotiations later this month.