Washington Editor

The U.S. government has contracted with the Canadian firm Cangene Corp. on a $362 million agreement for a botulism treatment, the first award for that potential bioterror agent.

The deal, which marks the latest effort by the Department of Health and Human Services under the $5.6-billion Project BioShield legislation, is a five-year development and supply contract for 200,000 doses of botulinum toxin immune globulin (heptavalent botulism antitoxin) to treat exposure to the bacteria and/or the toxin responsible for botulism. The Winnipeg, Manitoba-based company already has begun work on the project under an earlier research and development contract with the Centers for Disease Control and Prevention in Atlanta.

Already, such work has established a predictive efficacy profile for the product, which is derived from horse plasma, as well as proved the company's manufacturing capability. And given Cangene's history in the biodefense space - its programs date to 1999 - the company has a good deal of underlying framework in place.

"We've done this once before," Cangene President and CEO John Langstaff told BioWorld Today, noting that the company already supplies an FDA-approved product for biodefense purposes, Vaccinia Immune Globulin (VIG), to the U.S. Strategic National Stockpile. The product has antibodies to the smallpox virus and is licensed to treat certain adverse reactions to the smallpox vaccine. In addition, Cangene is supplying its anthrax immune globulin (AIG) product to HHS for testing, and the department has an option to purchase between 10,000 and 100,000 doses of it for a three-year period.

A notice was issued last fall to give other companies a chance to bid on the botulism product, but none came forth. So HHS awarded this contract under its "sole-source procurement" procedure, said Marc Wolfson, a department spokesman, because Cangene proved the only company with the capability "to provide us with what we need."

Cangene expects to make initial deliveries to the strategic stockpile in the next year to year and a half, after which it will begin to receive payments. While that initial amount was not disclosed, the price per dose will be fixed and discounted. But first the product must receive FDA approval, and to meet the usable product requirement, it must be manufactured under licensable conditions and meet certain safety and regulatory conditions.

"We actually don't foresee any problems from a licensure point of view," Langstaff said.

The product's efficacy needs to be proved in two animal models, per regulatory requirements for testing certain medical countermeasures, with safety to be demonstrated in animals and human volunteers. The company, which plans to apply for accelerated approval and fast-track review, stands to receive a supplemental payment upon FDA clearance.

In addition to the base contract, there is a possibility that optional task orders worth up to an extra $234 million may be awarded "at the sole discretion of HHS," Langstaff said. Such tasks include ongoing testing to support long-term product shelf life, maintaining product manufacturing and additional clinical testing in special populations.

The 200,000 doses in the contract stem from a determination made by a multi-agency committee, which Wolfson told BioWorld Today "makes the recommendation" based on a previously determined material threat assessment from the Department of Homeland Security. The committee includes members from Homeland Security, HHS, the Department of Defense and other federal agencies.

Botulinum toxins, which arise from the bacterium Clostridium botulinum that causes the paralytic illness botulism, are of high concern to the federal government. Homeland Security has determined it to be one of several potential bioterrorist weapons that represent a material threat to national security, along with anthrax and smallpox, as well as radiological hazards.

Wolfson said he has not heard that any additional biological agents would be added to that list in the near term, but he indicated that HHS is "getting very close" to announcing another BioShield contract that will focus on the development and procurement of an anthrax therapeutic to treat the fatal toxin that comes from the bacteria.

An anthrax vaccine has been the subject of a troubled BioShield contract that began two years ago with VaxGen Inc., of San Diego. That $877.5 million arrangement for 75 million doses has been delayed by adjuvant issues that recently led the government to rework the contract and require more testing, and speculation has arisen that the agreement could come undone. (See BioWorld Today, May 11, 2006.)

Langstaff doesn't expect any such problems to arise for Cangene, noting that the company would quickly be aware of any manufacturing problems. "We're hoping that we don't get to that stage," he said.

The latest developments around the VaxGen contract have led some observers to forecast a chilling effect in which the drug industry cools to government overtures for further biodefense work. But Wolfson said HHS is looking to "improve relations with the biotech world," adding that the department expects to hold an open forum conference later this year to "talk things out with the industry" over concerns and criticisms of BioShield's slow implementation.

In parallel, legislative movement remains afoot on Capitol Hill, where lawmakers continue to bandy about ideas for improving the law. Money from BioShield comes from Homeland Security's budget, although HHS makes the final awards to industry participants. The Office of Public Health and Emergency Preparedness in HHS oversees the management of such contracts.

Cangene will manufacture its botulism product at its Winnipeg facility, but will use its U.S. subsidiaries and other U.S. companies for all key subcontracting activities.

On Thursday, shares in the company (TSX:CNJ) gained C10 cents to close at C$10.50 (US$9.52).