Smallpox trial gives Acambis shot in arm

Acambis, the biotech group whose fortunes were transformed by orders for a smallpox vaccine, told investors yesterday that profits from its flagship contract to supply the US government will be higher than originally thought.

Acambis, the biotech group whose fortunes were transformed by orders for a smallpox vaccine, told investors yesterday that profits from its flagship contract to supply the US government will be higher than originally thought.

Acambis is supplying enough smallpox vaccine to inoculate the entire American population, but will now supply just one form of the vaccine instead of the two forms originally planned. That means substantial savings on human trials and manufacturing, according to John Brown, the chief executive of Acambis.

He said: "The starting material for both vaccines is identical but there were slightly different manufacturing methods used. We were about to embark on two expensive clinical trials for what was essentially the same product and it was in everyone's interests to consolidate the two programmes."

Acambis shares jumped 9.5p to 296p as analysts increased their profit forecasts to reflect the higher margins.

The US had an original order for 54 million doses with Acambis which it supplemented with a second contract for 155 million doses after the 11 September attacks, when fears grew that terrorists could use smallpox as a biological weapon. The original contract is being dropped, and replaced with an equal-sized order under the second deal, resulting in a small fall in Acambis's revenues in the current financial year that will be made up next year.

Income from the smallpox contracts has transformed the company into a profitable stalwart of the mid-cap index. First-quarter results yesterday showed Acambis made a profit before tax of £9.5m, compared to a loss of £2.8m in the same three months last year. They also revealed the group has tied up another two contracts to supply unnamed national governments with smallpox vaccine. In total, six European and four non-European governments are building stockpiles of Acambis's vaccine.