BARDA cited issues like reliance on overseas manufacturing, dependence on subcontractors, and IP uncertainty.

The Biomedical Advanced Research and Development Authority (BARDA) has reported to Maxygen that its proposal for the development of its MAXY-G34 as a countermeasure to acute radiation syndrome (ARS) will not be considered for a contract award.

BARDA found Maxygen’s proposal technically sound and highlighted the novel attributes of MAXY-G34, the comprehensive nature of the development plan, the promising efficacy data in animal models, and the safety data in previous studies of MAXY-G34 in breast cancer patients. However, BARDA also noted several weaknesses like dependence on overseas manufacturing, uncertainty regarding intellectual property issues with respect to MAXY-G34, and the company’s reliance on consultants and subcontractors.

“We are disappointed and surprised by this outcome given the positive nature of the discussions we have had with BARDA during the proposal review period, but we accept this final decision by them,” says James R. Sulat, Maxygen’s CEO. “We will evaluate our plans for the MAXY-G34 program in light of this development, and we will seek to create value from the program in other ways.”

Maxygen submitted a white paper entitled “Development of MAXY-G34 as a Medical Countermeasure for Acute Radiation Syndrome” in December 2010 in response to a Broad Agency Announcement. In February 2011, following review of the white paper, BARDA invited Maxygen to prepare a full proposal, which was submitted in May of this year.

Back in May 2009, Maxygen obtained $500,000 when it sold Cangene an option to exclusively license MAXY-G34 for ARS. Cangene submitted a bid to BARDA specifying the development of MAXY-G34 in this indication. BARDA, however, decided to eliminate Cangene from the competitive range, and by July 2010 Maxygen reported the expiration of its option and licensing arrangement with Cangene.

If Cangene had been awarded the government development contract and exercised the option, Maxygen would have been eligible to receive additional payments from Cangene, including licensing fees and a specified percentage of any net contract revenues recognized by Cangene under the government contract.

MAXY-G34 is a pegylated granulocyte colony stimulating factor (PEG-GCSF) that has been developed to treat chemotherapy-induced neutropenia. GCSF is a natural protein that stimulates the body’s bone marrow to produce neutrophils, a specific type of white blood cell that plays an important role in the defense against bacterial infections.

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