(Updated 05/24/09) In news that could affect a number of publicly traded companies that hold U.S. licenses for flu vaccines (see list below), Health and Human Services Secretary Kathleen Sebelius announced that the department will take important steps necessary to prepare for potential commercial-scale production of a candidate vaccine for the novel Influenza A (H1N1). The Secretary is directing approximately $1 billion in existing funds that will be used for clinical studies that will take place over the summer and for commercial-scale production of two potential vaccine ingredients for the pre-pandemic influenza stockpile.

"While firms that win a contract from the Department of Health and Human Services (HHS) to make a vaccine or therapy against the new flu strain possibly stand to make it big, other companies, too, are reaping the benefits of having their newer, yet unproven, technologies suddenly thrust into the spotlight," said Rodman & Renshaw analyst Elemer Piros.

"A lot of these companies would like to take advantage of this situation because they want to showcase their technology," he said. "What this really means is a great PR campaign."

The government currently is seeking information about new technologies that may possibly act against the H1N1 flu strain. However, HHS only wants companies that meet the criteria for its technology readiness level 7 or greater, meaning those firms with products in Phase II development and GMP manufacturing process capabilities, Piros noted.

The Centers for Disease Control and Prevention hopes to deliver one or both to vaccine manufacturers by the end of next week so scientists can begin the months-long process of producing shots.

The funds will be used to place new orders on existing contracts with companies that hold U.S. licenses for flu vaccines. With these orders, they will produce a bulk supply of vaccine antigen and adjuvant. Antigen is the active ingredient in a vaccine that causes the human body’s immune system to develop antibodies that help fight an invading virus. Depending on the results of clinical studies, adjuvants could be added to a vaccine to improve the immune system’s response and potentially reduce the amount of antigen necessary for the body to recognize and fight a virus.

Having both antigen and adjuvant on hand provides maximum flexibility in a future immunization program, if a program is recommended. For example, if needed these ingredients could be used in vaccine to help protect health providers and other members of the critical workforce, as recommended by the National Strategy for Pandemic Influenza.

According to Thomson BioWorld, one firm that Rodman & Renshaw's Piros said may change the whole spectrum of flu response is Philadelphia-based Hemispherx Biopharma Inc. (AMEX: HEB), whose Phase III chronic fatigue syndrome drug Ampligen now is being investigated in Japan as an adjuvant to flu vaccines.

As reported in BioMedReports this past week, HEB is expecting to hear from the FDA this coming week as to whether Ampligen receives approval as a Chronic Fatigue Syndrome (CFS) treatment.

With the "boats loads" of safety data available, Ampligen could quickly be developed for H1N1 flu strain, Piros said. He noted that Hemispherx already has been in discussions with the CDC about its product.

"This drug (Ampligen) has been available to certain U.S. clinics for several years," says Adrienne Dellwo, About.com's Guide to Fibromyalgia & CFS. "And there's a lot of evidence (both clinical and experiential) showing that it works. Some doctors claim they've seen improvement in 80% of people with ME/CFS who take Ampligen, and significant improvement in about 50%. They say a lot of seriously disabled people have even been able to go back to work because of it."

Results from a recent NewsScore Report survey of working doctors, appear to agree with Dellwo, particularly when the physicians were asked "If approved, do you feel Ampligen will likely become the standard of care for Chronic Fatigue Syndrome patients?" The majority responded that the scenario was "likely to occur."

But what about Ampligen's role as "a booster" in fighting the flu?

This week, Japan's Council for Science & Technology Policy (CSTP) awarded funds to advance research with influenza vaccines utilizing the adjuvant, Ampligen(r) (Poly I: Poly C12U). This after the number of swine flu confirmed cases in Japan has soared from four to 200 within days.

If the Japanese data is deemed credible, and CDC experiments show protection against the H1N1 virus by using Ampligen as an adjuvant, "then you don't need another vaccine. You just mix in this adjuvant with whatever you make every season," Rodman & Renshaw's Piros said.

While it is all speculation for now, "it could be the biggest surprise ever," he said.

Interestingly, HEB is a past presenter at Rodman & Renshaw's Healthcare Conference and Rodman & Renshaw, LLC acted as the exclusive placement agent for a big investment transaction which helped HEB raise $18.3 million this past week- their second public equity offering in two weeks.

Could it be that these institutional investors are looking beyond HEB's pending FDA decision and more at the potential "flu market windfall?"

One would never know it by looking at some of the panic driven, volatile trading of HEB stock that took place this week.

The folks at Fool.Com issued a report on Thursday that indicated HEB's stock was "Poised to Plunge." The article helped company shares tumble as nervous investors continued to wait for early news about Ampligen's CFS approval from the FDA, but one of our readers pointed out that it did so in misleading fashion.  The Fool's widely read story leads: "Based on the aggregated intelligence of 130,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, development-stage biotech Hemispherx Biopharma has received the dreaded one-star ranking." What the article fails to disclose is that a mere 106 users as of the date of publication (not 130,000-plus investors) gave the stock it's lowly rating.

Already tense traders got even more confused after TheStreet.Com posted this video of famous penny stock trader Tim Sykes bashing Hemispherx and others-- indicating that he would be shorting HEB's stock. Later the same day, on his own YouTube channel, Sykes posted his own video in which he said he would recommend buying HEB shares.

Perhaps most damaging was the rampant speculation on internet message boards and busy retail investor communities that the company's newest institutional investors were simply dumping shares for a quick profit because they "got them at a discount to begin with." The latest MFFAIS report, showing holdings/transactions filed between 02-21-09 and 05-22-09 did not confirm those rumors, but then again, who can?

"I think what's very attractive about Hemispherx, is that we have multiple shots on goal" says the company's CEO, Dr. William A. Carter, "We have emerged as a serious player in the influenza space. We have emerged as a very serious player in the vaccine space. We have unique relationships in Japan with the Ministry of Health and with the Japanese National Institutes of Health. We have done studies with world leaders, for example in the influenza space, in which our Alferon product has shown unique activities. Activities, I must say, which were not seen in the animal models- the so called 'monkey models.'  We've seen benefit there in these animal models that was not seen with the standards of present care which include a product called TAMIFLU. Now one always has to remember that animal models don't necessarily predict human experience at the end of the day although in pandemic situations, often animal models are and can be used to cause significant emergency approvals of the drugs and this has indeed happened with TAMIFLU and it may occur with other drugs. I would say we have at least a half-dozen major shots on goal which could create a major, major economic opportunity for Hemispherx not only in Chronic Fatigue, not only in flu vaccination, but in some of these catastrophic illnesses that could kill many many millions of people. We are a serious player in this disease and when you study our genetic lineage, it now appears that there is major traction near at hand."

According to officials, with these government funds manufacturers will also prepare pilot lots of potential vaccine for use in clinical studies to determine the proper dose for a vaccine, determine if adjuvants are appropriate and ensure a vaccine is safe and effective. The U.S. government will share as much information as possible from the results of these clinical studies with the World Health Organization and the global community so that other countries can benefit from the U.S. efforts to determine dosage, safety and effectiveness.

Another small biotech who has thrown their hat in the ring is Rockville, Md.-based Novavax Inc. (Nasdaq: NVAX), which is in Phase II development of its VLP-based recombinant seasonal influenza vaccine has the necessary certified GMP manufacturing capabilities for producing up to 30 million doses of vaccine if necessary.

In response to the outbreak, Novavax quickly shifted gears, said CEO Rahul Singhvi. The company was able to change its dynamic to address the H1N1 virus while continuing to service its ongoing programs. Singhvi told Thomson BioWorld that his firm is confident that its VLP technology can "make a difference" addressing the 2009 H1N1 virus strain or any other future flu threats.

Using its VLP technology, Novavax builds a structure similar to a virus, without the genetic material required for viral replication, and a VLP vaccine can be produced using recombinant DNA technology starting with the viral genetic sequence information.

Therefore, Singhvi believes, the timeframe for making a vaccine can be shrunk from the normal four months to six months to between 10 weeks and 12 weeks. "With these innovations, we can make a significant improvement in the speed with which a new vaccine can be created to address potential emerging diseases," he said.

On Friday, CDC scientists unveiled the most detailed genetic examination yet of the novel virus, finding that the new swine flu may have been circulating undetected in pigs for years.

That report, in the journal Science, still fails to solve the bigger mystery of when and where the virus made the jump to people and what genetic change allowed it to start spreading so rapidly (see the alarming related video about how the H1N1 virus is spreading quickly througout Wisconsin). The virus was first detected last month, and at least 42 countries now have confirmed it in more than 11,000 people. At least 85 people have died from it.

The confirmed cases don’t represent anywhere near the full scope of the outbreak: For every reported case of swine flu, there may be 20 people sickened with it, said CDC’s Dr. Anne Schuchat — more than 100,000 people in the U.S. There are signs that it is declining in parts of the country, although school-related outbreaks in New York City and elsewhere have led to the closings of about 60 schools affecting 42,000 students, Schuchat said.

Tom Bustamante, the Managing Partner at Ludlow BioVenture's commented, "Their can be no doubt that a bulk of this funding will find its way to the major players in vaccine production, such as Sanofi-Aventis (SASY.PA), Novartis (NOVN.VX), and GlaxoSmithKline (GSK.L).

"But, with the pending production of a new H1N1 vaccine now competing along for capacity with the standard seasonal flu vaccine, money may find its way to companies who can assist in solving such issues as production capacity, cost, and scalability. These abilities may also become especially important if needed for emergency use in poorer emerging nations that will need a more cost effective means for vaccine production."

"It is in our understanding that the Company has already put the feelers out offering their technology and solutions to US Federal agencies, so it will be interesting to see what may develop over the coming weeks. If this becomes a political issue like it did several years back when there weren't enough vaccine shots for the seasonal flu, then this could become a whole new animal. They have the production infrastructure, and the technology, all they need from the government is the green light to move ahead."

"Unlike other vaccine makers, Novavax uses a unique process separated from old egg-based technology, which in turn provides for not only cheaper production costs, but a much greater turn around to end product."

Investors interested in seeing BioMedReport's complete database of clinical trials and upcoming FDA decisions can access that information here.

The following table presents a comprehensive overview of influenza drugs and other antiviral agents that have made it to testing in humans. There are many other therapies are in earlier stages of development, including animal testing:

Drug Name           Organization                      Status
CSL-401             CSL Ltd                         Registered
Fluad-H5N1          Novartis AG                     Registered
GSK-1119711A        GlaxoSmithKline PLC             Registered
Grippol Plus        Solvay SA                       Registered
Influvac TC         Solvay                          Registered
Intradermal seasonal flu vaccine  Sanofi-Aventis SA Registered
Pandemrix           GlaxoSmithKline                 Registered
Panflu              Sinovac                         Registered

Celvapan            Baxter                          Recommended approval

634858              GlaxoSmithKline                Recommended approval
FluBlok             Emergent BioSolutions          Pre-Registered

H5N1 pandemic influenza vaccine  
                    Biken/ Kitasato Institute/Denka  Pre-Registered
H9N2 avian influenza vaccine  
                    Novartis                         Pre-Registered
Flu infants         Sanofi-Aventis                   Phase III
Fluval H5N1         Omninvest                        Phase III
GC-501              Green Cross                      Phase III
GSK-1557484A        GlaxoSmithKline                  Phase III
GSK-2186877A        GlaxoSmithKline                  Phase III
GSK-576389A         GlaxoSmithKline                  Phase III
Grippol TC          Solvay                           Phase III
Peramivir           Shionogi                         Phase III
Pre-pandemic  MF59-adjuvanted  H5N1 vaccine      
                    Novartis                         Phase III
R-118958            Daiichi Sankyo                   Phase III
VCIV                Baxter                           Phase III
Atvogen             HemispheRx                       Phase II
CSL-412             CSL                              Phase II
Favipiravir         Toyama                           Phase II
FluCell             Sanofi/Crucell                   Phase II
GSK-1247446A        GlaxoSmithKline                  Phase II
LAIV                BioDiem                          Phase II
463263              Intercell                        Phase II
434372              Novavax                          Phase II
427232              Crucell                          Phase II
394549              Sanofi                           Phase II
460762              Sinovac                          Phase II
426173              Solvay/ Norwood                  Phase II
430974              Novavax                          Phase II
AVX-502             AlphaVax                       Phase I/II
Human leukocyte
interferon alpha    HemispheRx                     Phase I/II
UMN-0501            UMN Pharma                     Phase I/II
423250              Baylor University              Phase I/II
424477              Vaxine                         Phase I/II

473074              Nat. Inst. Allergy &Infectious Dis.   Phase I/II
ADnVN1203/04.H5     Vaxin                          Phase I
Agrippal-IC31       Novartis/Intercell             Phase I
DAS-181             NexBio                         Phase I
Flagellin.HuHa/flagellin.AvHA    VaxInnate         Phase I
Flagellin.HuM2e     VaxInnate                      Phase I
Fluvacc             Avir Green Hills Biotechnology Phase I
Fluzone/JVRS-100    Juvaris                        Phase I
GBH-04L1            Avir Green Hills Biotechnology Phase I
GHB-01L1            Avir Green Hills Biotechnology Phase I
GSK-2115160A        GlaxoSmithKline                Phase I

H6N1-Teal-HK97/AA    Nat. Inst. Allergy &Infectious Dis. Phase I
M2e-HBc             Sanofi-Aventis/ Acambis        Phase I
MEDI-566            AstraZeneca                    Phase I
PER.C-flu           Sanofi/ Crucell                Phase I
PIA-0601            PowderMed                      Phase I
QS-21               Acambis ACM.SG                 Phase I
SCH-900795          BioDiem/Nobilon                Phase I
V-512               Merck & Co                     Phase I
VCL-IPM1            Vical                          Phase I
VCL-IPT1            Vical                          Phase I

VRCAVIDNA036-00-VP Nat. Inst. Allergy & Infectious Dis. Phase I

VRCFLUDNA047-00-VP Nat. Inst. Allergy & Infectious Dis. Phase I
Vaxfectin          Vical                           Phase I

428363             MedImmune/National Institutes of Health Phase I

468374             US Department of Health & Human Services Phase I
655089             University of Bergen            Phase I

458108             Novavax/Nat. Inst. Allergy & Infectious Dis.Phase I
646010             Sanofi                          Phase I
649281             Baxter                          Phase I

477348             Nat. Inst. Allergy & Infectious Dis./Baylor University Phase I

457691             Nat. Inst. Allergy &Infectious Dis. Phase I
446676             GlaxoSmithKline                 Phase I
427488             Generex                         Phase I

Source: Thomson Reuters Life Sciences group

Disclosure: No positions

BiomedReports is not paid or compensated to report news and developments about publicly traded companies. Full disclosure can be read at the bottom of / About Us / Section

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