Novavax, a re-startup biotech of sorts, was on its fiscal knees just three years ago. Now its executives are thinking big, albeit on multiple small scales.
The company plans to ‘‘clone” its new, small-scale vaccine-making plant in Rockville and put those clones in developing countries to fight influenza. And it has a new partner on board: GE Healthcare, a division of General Electric Co.
The best way to control the deadly bird influenza virus that experts fear could threaten human populations may be a series of small-scale, efficient vaccine plants in developing countries, according to James M. Robinson, vice president at Novavax.
That’s where a flu pandemic is most likely to start and where border quarantines could prevent vaccine imports once it begins.
Such a global ambition for Novavax would have been unthinkable less than three years ago when its board hired CEO Rahul Singhvi to save the company. According to biotech analysts, he did.
‘‘This is a turnaround situation,” Singhvi said. ‘‘When the company was really on its knees, it became not so much a matter of choice but a survival situation.”
Novavax was down to $5 million in cash. It was $35 million in debt and was burning cash at a rate of $2 million a month, running its operation near Philadelphia.
‘‘Luckily,” Singhvi said, the board had analyzed the vaccine business ‘‘a little bit.”
Singhvi had previously worked in the vaccine manufacturing side of Merck. As he was brought in to lead Novavax, national interest reached near hysteria with almost daily media warnings of the threat of pandemic flu.
Under Singhvi, the company shifted gears, from developing drugs for women’s health to focusing on its small vaccine unit in Rockville that was operating on small federal grants.
This new focus ‘‘will catapult this company to a completely new level,” Singhvi said.
By summer it plans to have its vaccines for pandemic flu and seasonal flu in mid-stage clinical trials. It ended 2007 with $46.5 million in cash and investments, including an undisclosed infusion from GE Healthcare.
The World Health Organization has reported that 16 vaccine-makers, including some of the biggest pharmaceutical firms in the world, are advancing vaccines against the killer H5N1 bird flu virus in more than 40 human clinical trials in 10 countries. Last week, Vietnam confirmed a new case of human infection, bringing the total of human cases to 373 in 14 countries since 2003, leading to 236 deaths.
Pilot plant to open soon
Novavax is on schedule to open a pilot-demonstration plant in a few weeks, making vaccines with its patented virus-like particle technology. The company recently moved its headquarters to Rockville and now has 86 employees, ‘‘adequate capital and a big-time partner” in GE Healthcare, announced in December, to explore building similar plants in other nations, Singhvi said.
Singhvi deserves much of the credit for turning around the company, says Ken Trbovich, a biotech analyst with RBC Capital Markets.
‘‘He came in when it was headed for bankruptcy. He was able to finance during a difficult financial time. Now it is coming to a more mature stage,” Trbovich said.
Novovax had always talked big, ‘‘but I think there is a difference of talking big as they were two years ago and execution. All the hype was not believable at that point,” he said. The company has done a good job getting started, but still has a long way to go.
Unlike conventional vaccine production using chicken eggs, Novavax’s method does not use live virus and all manufacturing materials that touch the vaccine are disposable. The pilot plant can be easily adaptable to making pandemic flu vaccine, seasonal flu vaccine and other vaccines in its pipeline, Robinson said.
‘‘It reduces labor and utility requirements. These allow Novavax to compete. We will use the same process for SARS [severe acute respiratory syndrome] and HIV ... vaccines,” he said.
‘‘On this concept they have been very early to adopt that into practices,” Trbovich said.
‘I think we are catching up’
A year ago, Singhvi was upset that the Department of Health and Human Services left Novavax out of its latest round of $132 million funding for pandemic flu vaccine research and development. He immediately issued a statement to calm investors. HHS had granted pharmaceutical giant Novartis $55 million and GlaxoSmithKline $63.3 million. Even Gaithersburg’s Iomai Corp., a relatively small biopharma, received $14.5 million.
Novavax is eager to show how its technology can compete with the big, egg-based vaccine plants being constructed by Novartis and Sanofi Aventis, Singhvi said. ‘‘I think we are catching up.”
The HHS grants require the companies to produce pandemic flu vaccine domestically. Sanofi is in the final stages of building its egg-based plant in Pennsylvania at a cost of $150 million. It will produce 100 million does per year and handle 600,000 eggs a day. Novartis is starting to build a $200 million plant to produce 50 million doses annually; that cost does not include site preparation and validation costs for federal approvals. Robinson said Jacob Engineering, which designed both, has told him that a plant to produce 75 million doses of Novavax vaccines would cost $40 million and would take one-third the space.
Novavax and GE Healthcare have teamed to study the interest of governments that might want such a plant.
‘‘Why would one of the biggest companies in the world want to work with us?” Singhvi asked. The companies said in a joint statement that if a flu pandemic starts, Novavax could develop and produce a vaccine within 12 weeks, instead of six months through the egg method.
‘‘Speed is of the essence to save lives,” Singhvi said.
‘‘This collaboration is a great first example of GE Healthcare realizing its strategy of enabling affordable and safe vaccine production for countries that need to better prepare for emerging infectious diseases,” said Peter Ehrenheim, president and CEO of GE Healthcare Life Sciences.
If Novavax can secure business through the GE partnership, ‘‘it will allow [it] to prove out the manufacturing in fairly rapid fashion,” Trbovich said. ‘‘For those foreign countries without the capability, this is a good idea.”
Another biotech analyst, Kevin DeGeeter of Oppenheimer & Co., praised Novavax’s innovation.
‘‘One of the key factors to keep in mind is how to do the scale-up of the manufacturing at a reasonable cost,” DeGeeter said. ‘‘Novavax has cracked this. Others have not been able to integrate small scale while keeping cost down.”
The Novavax-GE collaboration ‘‘makes for very interesting partnering,” he said. ‘‘From the GE end, they were looking for ways to go to governments and go with a full answer for making the argument that they should go into vaccine production at a scale appropriate for their populations. I think this will work but it will take a while.”
