Human Genome Sciences Lands $1.8B Anthrax Contract

By Joe Bacchus

Human Genome Sciences Inc. has received a two-part contract with the U.S. Department of Health and Human Services to help stockpile treatments for anthrax.

For the first phase of the contract, the Rockville-based biopharmaceutical company will receive approximately $1.8 billion to supply the government with 10 grams of ABthrax, the company’s human monoclonal antibody treatment for anthrax.

While 10 grams might seem like a miniscule amount, HGS spokesman Jerry Parrott said it would be more than enough for the government to do its own independent testing to determine ABthrax’s effectiveness. He said the company would provide whatever additional information and research the government might need.

If the health department likes what it sees, then under phase two of the contract it has the option of purchasing up to 100,000 doses of the ABthrax treatment. In an investor note, First Albany Capital analyst David Webber estimated that could mean up to $50 million in sales for HGS over the next three years.

The government has a year to decide whether to purchase the anthrax treatments. Parrott said it’s too early in the process to gauge whether the government will make the phase two purchases, but said getting ABthrax into federal laboratories was a, good, positive step.

James H. Davis, the company’s executive vice president, seemed confident in a release.

We are ready to supply the initial quantity of material, Davis said. We are hopeful that the Government can quickly complete the testing phase, so that we can supply ABthrax to the national stockpile for use in the event of a bioterrorist attack.

If made, the ABthrax doses would go into the Strategic National Stockpile as part of Project BioShield Act of 2004, which was enacted after 22 Americans were infected by anthrax-laced letters in 2001. It calls for the creation of a stockpile of treatments for biological agents like anthrax, a deadly bacterial infection, which the Centers for Disease Control and Prevention classifies as a Category A agent, the most dangerous of the designations.

In July, HGS announced the successful conclusion of phase I trials for ABthrax. The drug has since been fast-tracked for approval by the Food and Drug Administration. Webber noted that its success so far was a positive indicator as to whether the health department would make the phase two purchases.

Human Genome Sciences is the second company in the last week to receive such a contract. Cangene Corp., a Canadian biopharmaceutical company, announced last Friday that it will supply the health department with samples of its own anthrax treatment.

Parrott said initially four companies responded to the health department’s request for proposal of anthrax treatments, but two dropped out of the running earlier in the process.

Shares of Human Genome Services closed up 47 cents, or 3.5 percent, to $14.06 on trading on the Nasdaq yesterday.