Acambis hit by £10m US vaccine blow

The US government has scaled back plans for a stockpile of smallpox vaccine to counter the bioterrorist threat, in a move that wipes out £10m of expected profit at its supplier, the Cambridge-based Acambis.

The US government has scaled back plans for a stockpile of smallpox vaccine to counter the bioterrorist threat, in a move that wipes out £10m of expected profit at its supplier, the Cambridge-based Acambis.

Shares in Acambis tumbled 8.6 per cent on disappointment that it will not now receive the long-expected order for a final 27 million doses of the vaccine.

The company already supplies 180 million doses of the product, Acam2000, after securing a series of contracts that have transformed the fortunes of a previously loss-making biotech. But the US is understood to have decided that the quantities shipped already, plus existing stores of older vaccine, are sufficient to allow mass vaccination in the event of a bioterrorist assault.

Gordon Cameron, the chief executive of Acambis, said there had never been a contract to supply the remaining doses, only an understanding that they would be needed. "They have not been entirely explicit with us, but our sense is that they feel that their stockpile is essentially complete. Somewhere, someone in the government has been struggling to justify spending any extra money," he said.

Analysts cut back their profit forecasts for 2004 from £40m to about £25m, although a portion of that has only been deferred to next year because of delays to the announcement of a second contract for which the company is bidding. The US government had been expected to decide by July whether Acambis, its rival Bavarian Nordic, or both, would be given extra funds to develop a weaker strain of the vaccine for children, the elderly and people with compromised immune systems.

Acam2000 is yet to be formally approved for use, but Acambis said yesterday that a further three countries - including two European governments - have placed orders. The company will seek formal approval next year, based on the results of human trials which were halted midway earlier this year after health concerns. The product is linked to increased risk of heart attacks, but the US regulator has agreed that enough data exists to allow a decision on approval.

Investors have been concerned that Acambis faces a dip in profitability now that smallpox supplies to the US government are at an end and the other vaccines in its portfolio are several years from launch. However, the company said yesterday that it was talking to the US government about ongoing funding to keep its smallpox manufacturing plant functioning at a low level, so that it will be quickly available to ramp up production in the event of an emergency.

Shares in Acambis closed down 28p at 296p.