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Acambis suffers as US cuts drug order

by Rosie Murray
London Daily Telegraph

Acambis, the smallpox vaccine company that has been supplying the US government, saw its shares fall yesterday after it slipped into the red on its third quarter figures after a £22m profit for the same period last year.

The company lowered the floor for its full-year figures because of uncertainty over when it would see the benefit of key smallpox contracts. It posted a £4.5m loss on sales of £11.1m for the third quarter - slightly below most analyst expectations.

The third quarter of last year was far higher, with revenue of £65.8m and profit of £22.2m. Analysts had expected the company to either break even or post a small profit.

Acambis was once a biotechnology minnow but saw its revenues soar after the US, and other governments, placed orders for a smallpox vaccine because of fears over bioterrorism. The vaccine, which is live and still based on techniques pioneered over a century ago, has not been licensed by drug regulators, but bioterrorism fears are such that the company has been able to supply it on an unlicensed basis.

The company has now completed the bulk of the work on contracts to supply about 183m doses of smallpox vaccine to the US, although it has had problems along the way. Last April the company was forced to suspend the final clinical trials of the vaccine after finding three suspected cases of a heart disorder among volunteers in the tests.

Acambis has since managed to demonstrate that this is a side-effect of smallpox vaccines in general, rather than specific to the Acambis product.

In September, the US surprised the company by saying that it only wanted half of an order for 54m doses - raising fears that other countries, too, may be less keen on stockpiling the product.

The company is also now competing with Denmark's Bavarian Nordic to make a weak version of the vaccine for elderly members of the population.

Acambis shares slipped 8 to touch a 12-month low of 260p. Chris Redhead, pharmaceuticals and biotech analyst at Code Securities, said that the company was now "fundamentally overvalued".

"There has been little progress on Acambis' pipeline," he added, saying that the products the company is developing, such as a vaccine for West Nile Virus, were still a way off.

He said that Acambis will win half of the contract it is competing for with Bavarian Nordic "at best". He downgraded his share price target for the company from 250p to 230p.