North American Vaccine Inc. said yesterday that British health authorities would buy up to $65 million of the company's experimental meningitis vaccine next year for a planned mass immunization.
The one-year contract is contingent on the Columbia-based biotechnology company receiving marketing approval from Britain's Medicines Control Agency, its version of the U.S. Food and Drug Administration.
"This is very positive news for the company," said biotechnology analyst Vandana K. Bapna of Offutt Securities in Hunt Valley.
But, she cautioned, the company must work hard to get the vaccine approved in other European countries so that competitors don't capture the entire market. "Otherwise, it will be a one-time story," said Bapna.
If the vaccine is approved in the United Kingdom, North American Vaccine said it would supply enough vaccine for 3 million doses. The product would be produced at its Beltsville plant.
Tom Newberry, a company spokesman, said if all goes well the company expects to begin shipment of the vaccine between April and June of next year.
The company would be one of three pharmaceutical companies expected to supply powerful new Group C meningitis vaccines for an emergency public health program to immunize millions of British children and teen-agers.
The country is experiencing its worst outbreak of Group C meningitis in 50 years, according to the British-based Meningitis Research Foundation.
The disease has caused an estimated 1,500 cases and 150 deaths, the foundation said.
Most of the cases have been youths aged 15 to 19 and children under 5, the foundation statistics' show. The highest incidence of death has occurred in children under 4 years of age.
Group C meningitis, or Neisseria meningitis, is caused by a bacteria which inflames the linings of the brain and spinal chord.
British health authorities have taken the unprecedented step of agreeing to buy new vaccines before they are approved as safe and effective to ensure they can begin a mass immunization program early next year, said analysts.
The contract will provide North American, which has had a number of setbacks this year, with a sorely needed cash boost.
Randall Chase, the company's president and chief executive officer, said yesterday the U.K. contract is the first step in the company's plan to expand into the market for meningitis vaccines in Europe and the United States.
Bapna believes that if North American can line up a strong distribution partner to help market the vaccine in Europe, it could capture up to one-third of the estimated $300 million market for meningitis vaccines.
"It's a good product with superior performance," said Bapna.
The one-year British contract, she said, should help North American post a profit next year.
North American Vaccine lost $57 million on $8.4 million in revenue last year. For its second quarter, which ended July 31, the company reported a $13 million loss on $1.8 million in revenue.
Yesterday, North American also announced that Chiron Behring GmbH & Co., a subsidiary of Emeryville, Calif.-based Chiron Corp., wants to terminate an agreement to market North American's Certiva vaccine in Germany and Austria. The Certiva vaccine offers combined protection against diphtheria, tetanus and whooping cough.
Germany represents about 20 percent of the European market, or $50 million, for vaccines to protect children, said Bapna, the analyst.
North American said it would challenge Chiron's decision. A Chiron spokeswoman did not return a phone call for comment.
Chiron is the second company to terminate a Certiva marketing agreement.
This month, Abbot Laboratories also ended its agreement to sell the vaccine to pediatricians in the United States.
Shares in North American closed yesterday at $6.8125, down 18.75 cents.