Gsk and Acambis near smallpox deal

By Stephen Foley
Monday 12 November 2001 01:00

Two British companies are poised to win contracts to supply the US government with smallpox vaccine as part of the country's defence against bioterrorism.

GlaxoSmithKline, the UK's biggest drugmaker, and Acambis, the tiny Cambridge-based biotech, are meeting the US health secretary Tommy Thompson on Friday in the final stage of negotiations to supply 250 million doses of the vaccine – enough for every US citizen.

Insiders believe no single company will win a contract to produce the full stockpile. It is likely to be split between the three contenders still in the running, GSK, Merck of the US, and a joint venture between Acambis and US-based vaccines specialist Baxter International.

Analysts have put the value of the contracts at $1.3bn (£897m), after Mr Thompson admitted earlier this week it would not be possible to buy in the smallpox vaccine at $2 a dose as had previously been budgeted. He also warned the White House that the proposals were more costly than anticipated and it would need to release more cash for the project.

Acambis already has a smaller contract to supply the US with 54 million doses of smallpox vaccine at $8 a dose, which it has been required to accelerate since the events of 11 September. Acambis shares have doubled in value since the terrorist attacks and closed at 231.5p on Friday, valuing the group at £214m.

While each of the three contenders could yet be ruled out on concerns over the safety of their vaccines or their ability to manufacture sufficient quantities, a final decision is expected early this week.

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