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Novavax to Open Vaccine Plant in Md. HQ, Plans to Replicate It Beyond the US Border

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Rockville, Md.-based Novavax this week will open a prototype plant in its headquarters that will manufacture vaccines against avian influenza and other infectious diseases, and the company plans to replicate the facility in at least one additional country and possibly others with partner and equipment supplier GE Healthcare, according to a company official.
 
Costing around $5 million to build and rising to just under 5,000 square feet, the prototype plant is much smaller and cheaper than traditional vaccine-manufacturing facilities. The plant could also be developed and commissioned within 2-1/2 years — and at less than 40 percent of the cost — of traditional vaccine plants, which require four years from conception to commissioning, the company contends.
 
Novavax estimates that the plant will complete its required commission and validation within six months, at which time it will ramp up employment over time to at least 25 jobs, possibly more if production rises. The firm’s headquarters currently employs 82 staffers.
 
Novavax said the size and cost of its plant will give it a key advantage — namely, the ability to produce vaccines within 12 weeks of a flu strain being identified, or half the time required by conventional processes.
 
The plant, which occupies renovated space in the basement of Novavax’s headquarters at 9920 Belward Campus Drive, can produce 10 million doses of trivalent vaccine each year, which will be formulated seasonally to respond to changes in the prevalent flu strains, Len Stigliano, the company’s vice president, chief financial officer, and treasurer, said last week.
 
That’s a small share of the 2.4 billion-dose current capacity of vaccine plants worldwide, and a drop in the bucket compared to the estimated global annual demand for pandemic flu vaccine, which is said to approach 13 billion doses.
 
“Long-term, we really would like to make this a commercial facility, so we’re scaling it as a prototype of a future commercial facility, as well as a prototype of possibly using the same construct to make larger facilities,” Stigliano told BioRegion News last week, adding that company officials will cut a ceremonial ribbon May 1 for the plant.
 
Passport Required
 
Novavax and the plant’s equipment supplier, GE Healthcare, have met with officials from several undisclosed countries interested in seeing the prototype plant replicated within their borders. At least one such plant will be developed, with the capability of being scaled slightly higher with more equipment, but will be largely based on the prototype developed in Rockville.
 
“We’re in the process of starting dialogue with several countries to see what interest level they have,” said Stigliano, who participated in the meeting. “Our first country is probably going to be a developed country. It’s probably going to be Europe, but it could be in [the] Asia-Pacific [region] as well, where there are needs.”
 
The question for Novavax will be whether governments will be interested in taking on an in-border solution. The company reasons that if a pandemic appears and authorities don’t have the ability to manufacture a vaccine locally, “it’s doubtful they’ll be able to obtain a vaccine from another country. That’s the pitch, if you will, that we’re making,” Stigliano added.
 
The more receptive other countries become to that pitch, he said, the more such plants Novavax and GE Healthcare will be able to build.
 
“The limitation will probably be the ability to do tech transfer from, say, our expertise here to different countries,” said Stigliano.
 

“Our first country is probably going to be a developed country. It’s probably going to be Europe, but it could be in [the] Asia-Pacific [region] as well, where there are needs.”

Such a plant, as with the prototype facility in Rockville, represents the fruits of a collaboration announced last December by Novavax and GE Healthcare. GE Healthcare agreed to pay an undisclosed sum to Novavax, and will receive revenue from selling products and from a “small,” undisclosed royalty, Stigliano said.
 
Novavax’s vaccine technology is based not on live viruses or eggs as with traditional vaccine makers, but on “virus-like” particles that are the same size as the avian flu virus, as well as certain moth proteins that are similar to those of the virus.
 
The proteins are recombined and then grown within harmless baculoviruses in a VLP-based vaccine that matches the avian flu enough to spur the human immune system into full activation.
 
The company has begun Phase 2 clinical trials on a VLP vaccine against the H5N1 strain of pandemic avian flu, and expects to report results from those trials in the third quarter. A subsequent phase of human trials will start early in the third quarter, and interim results are expected by the end of that quarter, the firm said.
 
Like the prototype, the overseas plant will aim to save money and space by using “disposal” manufacturing that produce each lot of the vaccine using 100-liter bags that are autoclaved and disposed after each use, rather than maintaining storage tanks.
 
Stigliano said Novavax will use its VLP tech platform to develop vaccines for infectious diseases other than H5N1, including other subtypes of avian flu with pandemic potential, and human seasonal flu.
 
The company has two other vaccine candidates in development — for herpes zoster shingles and for an undisclosed disease — and is working to incorporate its VLP platform into vaccines against SARS and HIV that are currently in preclinical stages.
 
A Shift to Vaccines
 
For Novavax, the development of the new overseas plants would help fulfill one key goal of a nearly three-year turnaround effort aimed at repositioning the company into a vaccine maker.
 
That effort began in August 2005 when Novavax’s board promoted the company’s senior vice president and COO to president and CEO. Rahul Singhvi, who left Merck to run Novavax’s pharmaceutical development and manufacturing operations a year earlier, shifted the company’s focus away from women’s health products such as Estrasorb, designed to treat hot flashes and other symptoms of menopause. He instead opted to expand what had been a small vaccine unit in Rockville, after seeing its ability to obtain federal grants for research.
 
“We realized that there may be some real value in this technology, so we decided we would focus on vaccines and just slowly get out of the old business, which is what we’ve done,” Stigliano recalled.
 
Last year, Singhvi relocated Novavax to Rockville from the Philadelphia suburb of Malvern, where it leases a 51,000-square-foot building owned by BioMed Realty Trust, a publicly traded REIT based in San Diego.
 
Novavax has subleased the Malvern offices to PuriCore and is well under way to closing the Northeast Philadelphia plant where it made Estrasorb, according to Stigliano. That plant emplys between eight to nine staffers, but is set to shut down in July or August, Stigliano said. The lab will be turned back to an entity of health insurer Cardinal Health.
 
The relocation marked Novovax’s return to Maryland (the company had been based in Columbia) before bolting in 2004 for a what would become a three-year stint in Malvern’s Great Valley Corporate Center.
 
To lure Novavax away from Maryland, Pennsylvania state economic-development officials in 2004 awarded the company two grants worth $437,500 and a $500,000 loan to buy equipment, in return for creating 95 new jobs over three years. A spokesman for Pennsylvania’s Department of Community and Economic Development could not say last week how many of those jobs were created.
 
The refocusing of Novavax has compounded its losses. For example, R&D expenses jumped 55 percent last year, to $17.6 million from $11.3 million, reflecting advancement of the company’s pandemic flu vaccine into human trials, plus pre-clinical studies for a seasonal influenza program.
 
Asked what Novavax’s timetable for profitability is, Stigliano said “it’s kind of hard to predict right now. But we think that we have an opportunity to maybe commercialize something by probably 2011. If we go the whole way and we’re able to fund our development, 2011 is the first year we could actually generate revenue.”
 
That’s not a long time from a biotech-industry perspective, he said, given the US Food and Drug Administration’s roughly decade-long approval process for typical drugs.
 
“We’d be able to do that, from when we started, probably in four to five years, which is not bad,” Stigliano added.

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