Biotech Values

[ghmm]

Don't know how appropriate to post about Acambis on a Biotech board with talk of vaccines a while back thought it may be OK.

The London shares are taking a huge hit today (about 40%). It was widely believed they would get some of the contract 0 is a shock. A while back there was speculation they would be bought out by Chiron or someone else interested in vaccines. I think they still have a nice little business, wish I would have kept up more with them may be an opportunity to get them on the cheap today


http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=urn:newsml:reuters.com:2...

UPDATE 3-Acambis loses U.S. smallpox deal, shares slump
Tue Nov 14, 2006 6:21 AM ET

(Adds comment on potential deals, Baxter role, latest shares)

By Mark Potter and Ben Hirschler

LONDON, Nov 14 (Reuters) - British vaccine maker Acambis Plc <ACM.L> has been unexpectedly dropped from consideration by the U.S. government for a new smallpox vaccine contract that analysts believe could be worth up to $1 billion.

Shares in Acambis plunged 39 percent to a six-year low of 95 pence on Tuesday.

Acambis had been competing with Denmark's Bavarian Nordic <BAVA.CO> to supply the U.S. government with a weakened version of the smallpox vaccine suitable for vulnerable members of the population such as the elderly.

At 1100 GMT, Bavarian Nordic shares were up 27 percent at 521 Danish crowns.

Bavarian Nordic Chairman Asger Aamund told Reuters he was surprised Acambis had been eliminated and said he expected his firm would receive news from the U.S. government on its vaccine order by the end of the year.

"We've been sure all along that we'd win an order and I don't think it will take much longer," he said.

Acambis Chief Executive Gordon Cameron said he was perplexed by the U.S. government decision to eliminate his group from the process.

"We believe that our proposal would have met the requirements of the U.S. government, especially given Acambis' track record in the biodefence field," he said in a statement.

PRICE NOT THE ISSUE

A company spokesman said technical issues, rather than price, lay behind the move and Acambis was seeking a meeting with the U.S. Department of Health and Human Services.

"We have not received the specifics as to why our proposal is being excluded on technical grounds. We have requested a meeting with the HHS to get further clarity," he said.

"The response we have received relates only to technical issues," he added.

Acambis had already supplied the U.S. government with more than $500 million worth of standard smallpox vaccine as the country moved to build up stocks amid fears of bio-terrorist attack.

Analysts had assumed Acambis, which has Baxter International Inc <BAX.N> as a manufacturing partner, would win at least half of the new contract. "This is obviously a significant disappointment," Goldman Sachs analysts wrote in a research note. "In our view, management credibility has suffered a significant setback and highlights the imperative of strategic alternatives."

Analysts at UBS said the setback left Acambis with a maximum of two years' worth of cash and put it under more pressure to find a partner for its most advanced pipeline product, a vaccine against Japanese encephalitis, in the course of 2007.

The slump in the company's market value also leaves in doubt its potential to act as a consolidator in the European vaccine and biotech. Acambis appointed veteran dealmaker Peter Fellner as its new chairman earlier this year and Fellner told Reuters in February he intended to help Acambis make acquisitions.

Gudme Rasschou analyst Annette Rye Larsen said the setback for the British company played into the hands of its Danish rival.

"I believe more and more that Bavarian is the only company left that can supply the contract," she said. (additional reporting by Mette Fraende in Copenhagen and Michael Flaherty in New York)