Federal Government to Buy 20,000 Doses of Anthrax Drug
COLLEGE PARK, Md. -- The federal government will order 20,000 doses of a drug designed to block the lethal effects of anthrax spores in the body, a deal worth $165 million to its maker Human Genome Sciences, Inc.
The deal is also the first product sale for HGS, a 14-year-old Rockville-based biotechnology drug developer.
"Today's announcement is an important milestone in Human Genome Science's progress toward commercialization," said company CEO H. Thomas Watkins in a statement.
The purchase of ABthrax doses, announced Tuesday by HGS, comes under the federal government's $5.6 billion Project Bioshield initiative that stockpiles drugs and vaccines to use in case of a release of biological or chemical weapons. HGS expects to deliver the ABthrax doses to the stockpile by 2008.
HGS gave the Department of Health and Human Services 10 grams of ABthrax last year for testing under a contract HGS signed with the federal health agency that could have led to the purchase of up to 100,000 doses of the drug.
While the actual order was much smaller, some analysts said the value of the contract still approached the $200 million figure that analysts forecast when the deal was announced last year.
"It is a much smaller number of doses, so the price point is significantly higher than we anticipated," said Edward Tenthoff of Piper Jaffray. "The profitability from this contract is going to be a lot better than we were expecting."
Anthrax spores can be inhaled or absorbed through abrasions in the skin, and is often deadly if left untreated. Anthrax can be treated with vaccines and antibiotics, but ABthrax is designed to block the toxins that are released by the drug once it enters the body.
HGS began work on ABthrax shortly after anthrax spores were sent through the mail to Capitol Hill in Washington in 2001, about 20 miles away from the company's headquarters. But while the drug was given fast track status by the Food and Drug Administration, the company still had a lengthy wait for a decision on whether the government would buy it.
The company has already done safety testing on roughly 100 people, but it must still be approved by the FDA before it can be used.
Shares of HGS rose 14 cents to $9.94 each in morning trading on the Nasdaq stock market.
COLLEGE PARK, Md. -- The federal government will order 20,000 doses of a drug designed to block the lethal effects of anthrax spores in the body, a deal worth $165 million to its maker Human Genome Sciences, Inc.
The deal is also the first product sale for HGS, a 14-year-old Rockville-based biotechnology drug developer.
"Today's announcement is an important milestone in Human Genome Science's progress toward commercialization," said company CEO H. Thomas Watkins in a statement.
The purchase of ABthrax doses, announced Tuesday by HGS, comes under the federal government's $5.6 billion Project Bioshield initiative that stockpiles drugs and vaccines to use in case of a release of biological or chemical weapons. HGS expects to deliver the ABthrax doses to the stockpile by 2008.
HGS gave the Department of Health and Human Services 10 grams of ABthrax last year for testing under a contract HGS signed with the federal health agency that could have led to the purchase of up to 100,000 doses of the drug.
While the actual order was much smaller, some analysts said the value of the contract still approached the $200 million figure that analysts forecast when the deal was announced last year.
"It is a much smaller number of doses, so the price point is significantly higher than we anticipated," said Edward Tenthoff of Piper Jaffray. "The profitability from this contract is going to be a lot better than we were expecting."
Anthrax spores can be inhaled or absorbed through abrasions in the skin, and is often deadly if left untreated. Anthrax can be treated with vaccines and antibiotics, but ABthrax is designed to block the toxins that are released by the drug once it enters the body.
HGS began work on ABthrax shortly after anthrax spores were sent through the mail to Capitol Hill in Washington in 2001, about 20 miles away from the company's headquarters. But while the drug was given fast track status by the Food and Drug Administration, the company still had a lengthy wait for a decision on whether the government would buy it.
The company has already done safety testing on roughly 100 people, but it must still be approved by the FDA before it can be used.
Shares of HGS rose 14 cents to $9.94 each in morning trading on the Nasdaq stock market.
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