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Sep 3, 2013

Cangene Signs Up to $77M Contract Extension with CDC

  • Cangene said today its biodefense contract with the U.S. Centers for Disease Control and Prevention (CDC) was extended to include additional work that could net the company up to $77 million over four years—just a year after the two inked an extension deal that followed contracts stretching back to 2002.

    The new contract—under which the company supplies Vaccinia Immune Globulin Intravenous™ (VIGIV) into the U.S. Strategic National Stockpile—was extended by 18 months, followed by three additional option periods extending through 2017. VIGIV is used for treating and preventing some severe complications that may be associated with smallpox vaccination.

    The extension includes additional services to support license maintenance activities for VIGIV, now projected to generate up to about $6.9 million over 18 months, plus future optional services for maintaining the VIGIV license and options for additional manufacturing and plasma collections.

    If exercised, the optional periods could generate an additional $45 million in revenue if the baseline scope of work is implemented, or up to $77 million if the maximum scope is implemented.

    Cangene and the CDC originally entered into a five-year contract for VIGIV in 2002, then extended their accord to a 10-year term ending last year. The initial five-year contract allowed for the U.S. government to order up to 100,000 doses of VIGIV on an as-needed basis (Cangene completed a supply of 30,000 doses under this contract during fiscal 2004) and required the company to take VIGIV through regulatory approval in the United States.

    VIGIV was first accepted into the Strategic National Stockpile in 2002 and subsequently licensed by the U.S. Food and Drug Administration in 2005, followed two years later by Health Canada licensure.

    On August 28, 2012, Cangene inked a new deal with the CDC that the company said at the time was expected to generate $9.8 million over 18 months.


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