As its fiscal year drew to a close, a U.S. government agency doled out close to $90 million in contracted grant money to several biotech companies working on vaccines to prevent AIDS and other infectious diseases.

The National Institute of Allergy and Infectious Diseases divided $64.3 million in development funds for work related to HIV vaccines - Progenics Pharmaceuticals Inc. was awarded $28.6 million, Novavax Inc. received $19 million and Epimmune Inc. was granted $16.7 million. The NAIAD, which is a division of the National Institutes of Health in Bethesda, Md., awarded another $25 million for research related to biodefense-related vaccines - $16.6 million to AlphaVax Inc. and $8.4 million to Dynavax Technologies Corp.

Additional grants could be announced in the coming days as further awards are finalized, said a NIAID spokeswoman.

"I think there are a number of promising approaches today in this HIV vaccine area," Richard Krawiec, the vice president of investor relations and corporate communications at Progenics, told BioWorld Today. "But there certainly is an element of risk, and being able to have the government step in to fund this very promising research allows companies to take a risk for everyone's benefit."

Tarrytown, N.Y.-based Progenics said it would use its funding over the next five years for preclinical research, development and early clinical testing of a prophylactic vaccine candidate that contains genetically engineered HIV proteins that resemble the surface of the structures found on the virus. The product contains stabilized spike subunits designed to produce an immune response capable of inducing antibodies that neutralize or inactivate HIV before it can establish infection.

"Our approach is that these spikes or structures that stud the surface of HIV are what the immune system sees.'" Krawiec said. "But one of the difficulties in developing an HIV vaccine is that when you try to use these spikes as a vaccine, they disassociate. Our thesis is that there is mutation and variability, but the common element is the structure of the spike, which in viable virus particles, is relatively consistent. There are components of that spike that have to match the CD4 receptor, for example, for initial binding."

As a result, Progenics is working to create the 3-dimensional structure and elicit antibodies to it in an effort to mimic the surface structures of the virus as they occur in nature. The contract's funding is subject to compliance with its terms and payment of fees is subject to achievement of specified milestones.

Progenics' scientists, the principal investigators under the contract, will head the vaccine development effort in partnership with collaborators at the Weill Medical College of Cornell University in New York and the Tulane National Primate Research Center in New Orleans. Under a subcontract, they will head the vaccine design and animal testing core groups, respectively.

"We're working in an animal model right now," Krawiec said. "We have a construct that we think is useful, and we are evaluating its ability to induce neutralizing antibodies."

Beyond its latest HIV vaccine program, the company is exploring two other potential products, as well. Its PRO 542 compound, a viral-entry inhibitor that blocks viral attachment, remains in a Phase II trial. A preclinical compound, PRO 140, is a humanized monoclonal antibody that inhibits viral binding to the CCR5 receptor in development. Progenics plans to file an investigational new drug application for PRO 140 later this year.

The company's stock (NASDAQ:PGNX) gained 17 cents Monday to close at $17.53.

• Novavax's award also comes in the form of a five-year grant, during which the Columbia, Md.-based company will serve as the prime contractor. Emory University in Atlanta, Tulane University and the University of Pittsburgh will serve as subcontractors.

The HIV vaccine candidates will be based on Novavax's virus-like particle (VLP) platform technology, which has been used for other viral vaccines being developed by the company, including influenza. The company said virus VLPs, which are noninfectious protein particulate structures that resemble viruses, elicit immune responses when administered as a vaccine.

The company's stock (NASDAQ:NVAX) rose 7 cents Monday to close at $7.37.

• San Diego-based Epimmune's stock rose 11.8 percent on news of its five-year grant. Its shares (NASDAQ:EPMN) climbed 33 cents Monday to close at $3.16.

The company will apply the funding toward the design and development of prophylactic HIV vaccines for clinical evaluation by the NIAID-sponsored HIV Vaccine Trials Network, as the award stems from the agency's HIV Vaccine Design and Development Teams program.

Epimmune will use its epitope technology to identify protein fragments from conserved regions of multiple HIV virus proteins for use in candidate vaccines in an effort to make it harder for the virus to escape the vaccine-induced immune response. Epimmune and Bavarian Nordic A/S, of Copenhagen, Denmark, will jointly test a multi-epitope vaccine. Menlo Park, Calif.-based SRI International will conduct a portion of the development work, while San Diego-based Althea Technologies Inc. will manufacture the DNA vaccine.

• Beyond the HIV research, Research Triangle Park, N.C.-based AlphaVax received two separate grants. It will use the first, worth $9.1 million, to develop a vaccine against botulinum neurotoxins, while a $7.5 million grant is for a vaccine against a group of equine encephalomyelitis viruses that can cause illness in people and horses. The NIH awards will be spread over four-and-a-half-years to fund preclinical development, manufacturing of the vaccines for clinical trials and a Phase I study.

The privately held company's NIH-sponsored biodefense research dates to last year when it received $6 million for work on a vaccine against Marburg virus. In all three programs, AlphaVax is collaborating with the U.S. Army Medical Research Institute of Infectious Diseases (USAMRIID) in Fort Detrick, Md., where work with the disease-causing forms of the biodefense agents will be performed. Its vaccine technology is based on its ArV (AlphaVax replicon vector) system, which was originally developed by USAMRIID and the University of North Carolina at Chapel Hill.

• Dynavax's total funding, which comes in the form of three grants, will be applied to the development of infectious disease products based on its second-generation ISS (ImmunoStimulatory DNA Sequences) technology, including an anthrax vaccine for rapid protective immunity, an influenza vaccine for controlling a pandemic flu outbreak, and an aerosolized ISS product for enhancing the lung's ability to respond to infections by airborne pathogens.

ISS are short synthetic DNA sequences containing CpG motifs that act as signaling molecules to enhance immune responses against foreign pathogens and cancer, and to suppress inflammatory responses caused by allergens. Dynavax's second-generation ISS compounds, known as chimeric immunoregulatory compounds, are designed to regulate the immune response with increased potency and specificity, and may be tailored to specific clinical applications.