VaxGen says 'no grounds' for proposed investigation into $877.5 million anthrax contract

By E. Janene Geiss

Philadelphia, April 6 - VaxGen, Inc. issued a statement late Wednesday from its president and chief executive officer, saying the company was surprised by a call for an investigation into its $877.5 million anthrax vaccine contract.

Lance K. Gordon made the statement in response to the proposed investigation by Congressman Mike Rogers, R-Mich., according to a company news release.

The company said it believes its Project BioShield anthrax vaccine contract, which was awarded in November 2004 for a stockpile of 75 million doses of a modern anthrax vaccine, was the result of an open, competitive and fair solicitation.

"To the best of our knowledge, [it] complied with any and all applicable laws, rules and regulations," Gordon said in the release.

This contract followed two earlier competitive awards from the National Institute of Allergy and Infectious Diseases to VaxGen in 2002 and 2003 for the purpose of developing an anthrax vaccine, officials said.

The company said it believes that during the solicitation process the agency received multiple bids and the agency undertook a robust technical and business evaluation of all bids.

Upon completion of that evaluation, VaxGen said it negotiated a contract with the agency.

"We believe our bid was chosen based on technological, scientific and cost grounds. We also believe that we won this open and fair solicitation because we consistently met the demands of the previously awarded [Allergy and Infectious Diseases] contracts for the accelerated development of a modern anthrax vaccine," Gordon said in the release.

VaxGen said it believes there are no grounds for an investigation.

On Wednesday, the company also received a warning letter from the Office of Compliance and Biologics Quality of the Food and Drug Administration's Center for Biologics Evaluation and Research, alleging that a document distributed by the company at a biodefense research conference contained statements prematurely promoting its anthrax vaccine as safe and effective prior to FDA approval. That is a violation of the Federal Food, Drug and Cosmetic Act and related regulations, an 8-K report said.

The company complied with the FDA's request to stop disseminating the document and said it will work with the FDA on corrective action.

VaxGen is a Brisbane, Calif., biopharmaceutical company engaged in the development, manufacture and commercialization of biologic products for the prevention and treatment of human infectious diseases, including anthrax and smallpox.

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