The U.S. Department of Health and Human Services has decided to drop a request for proposals for a next-gen recombinant protective antigen anthrax vaccine, saying the agency doesn't believe that developers can deliver one that could win FDA approval within eight years. The sudden shift pulled the rug out from underneath PharmAthene's stock (PIP); on Tuesday the biotech's share price plunged by 50 percent as investors got a chance to digest the implications of the news.
Shares of Emergent BioSolutions were also dinged in the onslaught, dropping 8.5 percent, despite the company's hasty reassurance that the change at HHS would not affect its $400 million contract to supply BioThrax to the CDC. Earlier this week, PharmAthene reported positive early-stage results for its countermeasure to a chemical nerve agent. And PharmAthene's CEO tried to put the best spin possible on the news from HHS.
"While we are disappointed by today's news, we remain encouraged by [the Biomedical Research and Development Authority's] continued support for the development of a second generation anthrax vaccine," Chief Executive David Wright said. "We will continue to work with BARDA to determine how to provide a next generation anthrax vaccine to the American public in the shortest period of time."
Some analysts weren't so optimistic. Earlier today WBB Securities downgraded PharmAthene and almost cut its targeted share price in half.