UK drugmaker Acambis is no longer in the running for a lucrative contract to supply smallpox vaccines to the US government, it said this morning, prompting a swift decline in its share price.

A hefty 35% was wiped off the value of its shares in early morning trading after the company confirmed that the US Department of Health and Human services had decided that its tender to supply its modified vaccinia Ankara (MVA) vaccine was ‘uncompetitive’.

Acambis and US partner Baxter were vying with rival vaccine manufacturer Bavarian Nordic to win the contract to supply smallpox vaccine that can be used in the 20 million Americans who cannot receive the traditional shot.

In August, Acambis published Phase II data from its latest smallpox vaccine candidate - MVA3000 - showing that it generated a fourfold increase in neutralising antibodies against the virus in more than 75% of patients.

Bavarian Nordic only player left

Meanwhile, Bavarian Nordic has been developing its own MVA-based vaccine, called Invamune, and the two companies have been locked in a legal battle over rights to technology involved in the manufacture of MVA smallpox vaccines, with the International Trade Commission delivering its somewhat equivocal verdict on the dispute in September.

A spokesman for Bavarian Nordic told Pharma Times that his company is now the only one in the running for the contract, which is estimated to be worth 'several hundred millions of dollars'. There is no timeline set for a decision by the HHS on the tender, he said, but added that this is expected 'quite soon'.

Meanwhile, Acambis said it intends to request a meeting to gain further clarification, following which it will ‘consider its options’. It added that the US National Institutes of Health has indicated that it intends to continue Acambis' existing MVA contracts at their current price and scope.

“We are surprised that the US government would eliminate Acambis from the RFP process,” said Acambis chief executive Gordon Cameron in a statement.

“We believe that our proposal would have met the requirements of the US government, especially given Acambis' track record in the biodefence field.”