Project BioShield - Challenging and Strengthening the Biodefense
Arena
Project BioShield - Challenging and Strengthening the Biodefense
Arena
Threat of Avian Flu Pandemic Escalates Need for Biological
Countermeasures
By: Ann-Marie Fleming November 2005
Since the attacks of 9-11 the U.S. Government has injected
considerable funds into the biodefense arena for the development
and production of countermeasures against potential biological
threats. With current fears of a possible avian flu pandemic, in
addition to bioterrorist concerns, the issue of biosecurity has
been readdressed. One of the main government initiatives is
Project BioShield, which was signed into law in July 2004 to
help spark participation in biodefense from the private sector,
and in particular from biotechnology and pharmaceutical
companies.
Project BioShield has opened the door for many industry
participants as it has helped to establish a market for
biodefense. By providing companies an arena to develop
countermeasures and receive funding, this legislation has
created a viable market. A major advantage of the biodefense
environment is that you have products purchased prior to FDA
approval, with products that are earmarked for contribution
added to the strategic national stockpile.
"The goal of Project BioShield is to converge the government's
intent to purchase with the ability of the capital markets to
fund. Those companies, who effectively advance their treatment
countermeasure from a regulatory standpoint, should expect the
government to acquire that treatment for the national stockpile.
This reality provides significant incentive for the capital
markets to infuse the equity resources that will drive the
countermeasures into the marketplace. It should be noted that
the pathogens of greatest concern do not allow for human
efficacy studies for obvious humanitarian reasons. So in
essence, you have an abbreviated regulatory path with a back-end
guarantee to purchase," stated James A. Joyce, CEO of Aethlon
Medical, Inc, a developer of the first medical devices to treat
infectious diseases, including several Class "A" biological
weapon threats.
A company that has been able to benefit on a significant level
from BioShield is VaxGen. In November 2004, VaxGen was awarded a
contract valued at approximately $877.5 million for the purchase
of 75 million doses of the Company's anthrax vaccine. Paul
Laland, Vice President, Public Affairs for VaxGen explains
BioShield's advantages, "In our case we have a large
well-defined government market, anthrax. Our first commercial
milestone would be when we deliver 25 million doses of a
new-generation vaccine to the national stockpile and later an
additional 50 million doses. Beyond the initial delivery to the
national stockpile, we also expect downstream revenue from
product replacements. Our product is anticipated to have shelf
life from 3 to 5 years so at some point it has to be replaced.
Additionally, you also have the U.S. military, foreign
governments as well as state and local governments."
Acambis plc, a leading developer of vaccines to prevent and
treat infectious diseases, identifies tremendous benefits within
BioShield and the biodefense industry as a whole in light of
their smallpox vaccines. As Clement Lewin - Vice President, US
Government Affairs and Strategy describes, "BioShield provides
significant opportunities for revenue generation, enhancing
organizational capabilities and skill sets. It is a great
opportunity to collaborate with the FDA and the Health and Human
Services (HHS). Finally, it puts a company in the forefront of
public health and bioterror issues."
Challenging the Industry:
The advantages that accompany Project BioShield, however are not
without its challenges. The process of distribution of advanced
contracts remains an area of controversy as the timing and
somewhat unclear parameters do not always provide the
opportunity that the program initially suggested. As Lewin
explains, "The procurement process can be unclear at times, for
example RFP timing, is taking a bit longer to come out and the
order volumes can vary from early estimates. This is significant
as there are large fixed costs in both clinical development and
manufacturing of the products, which has a considerable impact
on pricing and profitability for companies. The warm-base
concept, which is to provide a surge capacity, has also proven
challenging. I think everybody recognizes that it needs to be
done, but actually getting all the details in place can take
quite a while. Companies who have invested in the manufacturing
run the risk of these facilities sitting idle unless they have
an alternative use."
Hollis Eden Pharmaceuticals, a developer of a treatment for
Acute Radiation Syndrome (ARS), has been heavily involved in the
biodefense arena with their Neumune