VaxGen AIDSVAX BLA Slated For 2004 While Manufacturing Work Is Finished

VaxGen is pushing back its BLA filing for the AIDS vaccine AIDSVAX until 2004 while it works to fulfill pre-approval manufacturing requirements.

Although the clinical trial data will be available earlier, "there's still a [large] amount of work that has to be done, from proving a vaccine works to satisfying the FDA that you have a licensable facility with what is called a [chemistry, manufacturing and controls] section," VaxGen CEO Lance Gordon, PhD, said during a July 2 teleconference discussing the company's revised AIDSVAX agreement with Genentech.

Completion of the AIDSVAX pre-approval manufacturing work "is really the driving force behind our [manufacturing joint venture] Celltrion. It was the driving force behind our renegotiation with Genentech," Gordon said.

"It was basically unacceptable for us that we could be in a position where we had proven that we had an effective vaccine, but not be in a position to support a full license for marketing."

Under VaxGen's original contract with Genentech, VaxGen was to file a BLA for AIDSVAX by 2002. The new agreement changes the deadline to May 2004.

Under the revised agreement, Genentech will no longer have an option to manufacture AIDSVAX. The product will be manufactured by Celltrion, a joint venture between VaxGen and several South Korean companies, at facilities in South San Francisco and Incheon, South Korea.

The AIDSVAX BLA will initially include data from the South San Francisco plant, which VaxGen anticipates will be completed by 2004. The facility will have capacity for 10 mil. doses of AIDSVAX per year.

VaxGen plans to later amend the application to add the Incheon facility, which is slated for completion in 2006 and will be the larger of the two plants, producing 200 mil. doses of AIDSVAX per year.

As part of its focus on the manufacturing requirements for AIDSVAX, VaxGen recently hired former Genentech Senior VP-Product Operations James Panek as senior VP-manufacturing, and former Titan Pharmaceutical VP-Regulatory Affairs Carmen Betancourt as VP-regulatory affairs & quality systems.

Betancourt was also previously at Genentech. VaxGen was created as a spin-off of Genentech's vaccine unit in 1995 and went public in 1999 (¹ (Also see "VaxGen IPO Could Allow For Completion of AIDS Vaccine Phase III Trials" - Pink Sheet, 7 Jun, 1999.), p. 22).

VaxGen has AIDSVAX in two Phase III trials and expects to announce results of the first trial in the first quarter of 2003. Results from the second trial are expected to be announced nine months later, in the third or fourth quarter.

Under the revised agreement, Genentech will retain its marketing rights for AIDSVAX in the U.S., Canada, and Mexico, while VaxGen will have marketing rights outside of North America.

If Genentech opts to market AIDSVAX in North America, it would pay for 33% of VaxGen's development costs, and VaxGen would share in 30% of the profits.

VaxGen said it does not intend to develop a sales force because it will primarily target governments and organizations such as the Global Alliance for Vaccines and Immunization and UNICEF for sales to underdeveloped countries. The company anticipates partnering with other companies for sales to group practices and hospital pharmacies.

The revised agreement reduces VaxGen's royalty obligation to Genentech for sales outside North America from 25% to a maximum of 15%. For sales to developing countries, Genentech is lowering VaxGen's royalty obligation by half, to 7.5%.

VaxGen's stock fell about 3% on news of the filing delay, following a 20.9% decline in June. The "F-D-C Index" of NASDAQ pharmaceutical stocks fell 11.8% for the month. The composite index declined by 11.4% (see chart: " ² Monthly 'F-D-C' Index of OTC Drug-Wholesaler Stocks ").