Merck, NewLink nab up to $76M BARDA contract to back Ebola vaccine

Partners Merck ($MRK) and NewLink Genetics ($NLNK) have nabbed a $24.8 million contract to support the development of their Ebola vaccine. The candidate just won a breakthrough designation from the FDA and priority medicine status from the EMA in July, with an FDA submission expected next year.

The new grant brings the total invested into the Ebola vaccine candidate, rVSV∆G-ZEBOV GP (V920), by the Biomedical Advanced Research and Development Authority (BARDA) of the U.S. Department of Health and Human Services to more than $100 million. The award also includes another optional $51 million. The funding is slated to go to manufacturing facility readiness, manufacturing process qualification activities and clinical trials.

“This new contract issued by BARDA will enable accelerated full-scale production of V920, once it is approved, and is a critical step in helping to make this vaccine available to the health care community as they work to control epidemics and protect medical workers and others at high risk," said Dr. Thomas Monath, CSO and COO of the NewLink Infectious Disease Division, in a statement.

Merck in-licensed the vaccine candidate from NewLink in late 2014, with the pharma gaining exclusive worldwide license to develop and market it. The pharma paid a $30 million upfront in October 2014 followed by a $20 million milestone in February 2015 for the start of the pivotal clinical trial. NewLink stands to receive escalating single-digit to double-digit royalties on sales of the Ebola vaccine.

The BARDA infusion goes to a subsidiary of NewLink to continue to support the development of V920. The candidate was originally in-licensed by NewLink from the Public Health Agency of Canada (PHAC).

Based on BARDA’s support, V920 advanced through at least 12 clinical trials, including Phase III, in less than two years. Merck isn’t alone among the big pharmas in the development of an Ebola vaccine; Johnson & Johnson ($JNJ) and GlaxoSmithKline ($GSK) are also among those working on one.

Small cap NewLink was up on the latest BARDA news to a market cap of more than $450 million; it hasn’t recovered from May when it was crushed on the news that its Phase III pancreatic cancer trial for vaccine algenpantucel-L failed to meet the primary endpoint.