VaxGen tries to regroup
After HHS cancels its $877 million anthrax vaccine, company looks to merge or partner with others
More problems for South San Francisco-based VaxGen. The company, readers may recall, recently lost a $877 million Project BioShield contract after clinical trials showed that the company’s flagship anthrax vaccine was a bust. That left the company — which had also produced a failed AIDS vaccine — to explore other ways of demonstrating value. After considering selling off its assets, the San Francisco Chronicle reported, VaxGen’s board then considered mergers or partnerships with other companies, an effort that was hindered by the company’s ongoing dispute over payment for the failed anthrax vaccine. Fortunately, that issue at least has been cleared up: Health and Human Services has agreed to pay VaxGen $11 million and “void the company’s potential liability for the extra cost the government might bear if it procured the anthrax vaccine from another source.”
The payment leaves VaxGen with $91 million in cash, as well as assets including scientific expertise, a leased manufacturing plant, and a trained staff. (The company slashed its workforce in half in January to ninety employees, and it now spends $3 million per month.) As such, the company believes it would make a strong partner for a company ready to move forward with their own experimental drugs. There is just one glaring problem: according to the Chronicle, “VaxGen’s talks with potential partners are still clouded because the company is not current on its audited financial reports” — a problem the company is currently attempting to resolve by hiring outside consultants.
