Acambis wins U.S. smallpox vaccine contract

LONDON (Reuters) - Vaccine maker Acambis ACM.L has won a long-awaited 10-year contract, worth $425 million (213 million pounds), to supply the U.S. government with a smallpox vaccine, the company said on Wednesday.

Acambis also said it was to raise 40 million pounds through a placing and open offer of around 37.7 million new shares at 115 pence each.

The stock jumped more than 6 percent to 129.5 pence before retreating to stand up 1.2 percent at 123 pence by 8:35 a.m.

"The economics of this deal to Acambis are quite significant," Chief Executive Ian Garland said in a conference call with reporters, noting annual revenue from the deal will cover operating costs at the firm's two manufacturing centres in the United States and allow further cash flow for research and development.

The deal includes provision of at least 9 million doses per year of the pharmaceutical company's vaccine ACAM2000, valuing each dose at an average of $3.96 over the course of the contract, after taking out license maintenance costs.

The U.S. government's Center for Disease Control and Prevention (CDC) has previously bought more than 195 million doses of the vaccine to stockpile, before it was approved by the Food and Drug Administration last year, at an average price of $1.95 per dose.

Garland said there was potential for the CDC to order up to 39 million doses starting in the fifth year of the deal, which would increase the total value of the contract to $660 million.

Analysts were impressed by the value of the deal and the potential for further sales, and said the fully-underwritten share placing had removed near-term funding risk.

"Attention can now shift to the vaccine pipeline, largely partnered with Sanofi Pasteur, which we believe is substantially undervalued by the current share price," Peter Welford from Lehman Brothers wrote in a note.