Powderject withdraws anti-tuberculosis vaccine

Powderject, the vaccines company run by the Labour Party donor Paul Drayson, slashed its profits forecasts by one-fifth yesterday as it announced that the group had recalled its supply of BCG vaccine throughout the UK and Ireland.

In a statement issued last night Powderject said it had voluntarily withdrawn the anti-tuberculosis vaccine in the UK after routine tests revealed that some batches were not up to specifications.

The company stressed that there were no related safety implications, but warned that its profits for the full-year were likely to be £5m lower than previous forecasts because of costs associated with the recall and the write-off of its stocks of the drug. The company had previously been expected to earn £25m in the full year to 31 March 2003 on sales of £160m.

Powderject said the decision to recall the BCG vaccine followed routine tests on some batches in Ireland which revealed that some batches were potentially less potent than normal. Although independent experts consulted by the company confirmed the reduction in potency does not change the efficacy of the vaccine, it meant the vaccine failed to meet "end of shelf life" specifications and led to its licence being suspended in Ireland.

As a result, the company decided to withdraw the vaccine, which has a shelf life of three years, throughout the UK as well. It said it was co-operating fully with the Department of Health and was helping the Government to secure alternative supplies from other sources.

The BCG vaccine contributed about £10m in sales for Powderject each year, and, alongside its flu vaccine, Fluvirin, helped the company report a maiden profit of £1.2m after tax in May this year.

The company warned last night that it was unlikely to be able to relaunch the BCG vaccine this financial year because of the time it would take to answer regulators' questions and the lengthy manufacturing process involved in producing the drug.

Powderject's move into the black took the City by surprise as the company's attempts to refocus itself away from its needle-less injection technology paid off earlier than expected.

But its move into supplying vaccines has also been dogged by controversy, after it emerged that Powderject won an exclusive £32m government contract to supply smallpox vaccine at the end of last year, shortly after its chairman and chief had made two £50,000 donations to the Labour Party.

At the time of the company's results in May, Mr Drayson maintained that Powderject had won the contract "fair and square" in a bidding process with four rivals. He also pledged to continue giving money to the Labour Party in a personal capacity.

Last month, the company was also forced to defend itself against allegations that its smallpox vaccine was less effective than rival products, especially in countering risks posed by bioterrorists.

The Powderject vaccine is based on the so-called Lister strain, while US vaccines are based on the "New York City Board of Health" strain. However, microbiologists questioned whether there was any persuasive evidence to show which strain worked best.