IF THERE Was Ever Any Doubt That the Humble Vaccine, for Years a Backwater of Pharmaceutical Research, Is Back in Fashion Then the Rising Fortunes of Powderject Pharmaceuticals and Acambis Have Put Paid to That

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IF THERE was ever any doubt that the humble vaccine, for years a backwater of pharmaceutical research, is back in fashion then the rising fortunes of Powderject Pharmaceuticals and Acambis have put paid to that.

Over the past few months, Britains two vaccine specialists have been as much in the news for their stellar share price performances as for their rivalry to secure lucrative government contracts.

Both have seen their shares soar and their balance sheets substantially bolstered by winning government contracts to supply a smallpox vaccine, Powderject for the UK, Acambis for the US.

The ongoing controversy surrounding the award of the ? (E36.8m) British government contract to Powderject, whose founder and chief executive Paul Drayson is a British Labour party donor, has given their rivalry an added dimension.

With vaccines such an integral part of governments healthcare policies, especially in the wake of the 11 September terrorist attacks and rising concerns of the threat of biological warfare, both Powderject and Acambis look well placed to continue to benefit from any future commercial developments.

So how do the two rivals match up?

Powderject has changed substantially since it floated in 1997 as a drug delivery company whose key product was its needleless injection system.

A series of acquisitions, notably the vaccines business of Medeva, has turned the company into the sixth-largest vaccines maker in the world. Aside from vaccines for flu, tuberculosis and smallpox, Powderject is also involved in research into groundbreaking new products such as a DNA vaccine to prevent hepatitis B infection.

The companys flu vaccine makes up the bulk of its profits and a 45% sales jump of the vaccine helped Powderject report a pre-tax profit of ?,000, (E160,000) compared with a loss of ?5m (E32.8m) in the year to March 2001.

Much of the euphoria, however, was wiped out last week after Powderject was forced to issue a profit warning on the back of recalling its tuberculosis vaccines in the UK after worries over adequate potency levels.

The recall is also likely to lead to a pre-tax profit shortfall of ?(E8m) for the fiscal year of 2003 and industry sources believe Powderject may not win the contract when it comes up again for tender at the end of the year.

Unfortunately for Powderject, last weeks product recall is just the latest blow to the company which has been dogged by controversy ever since it emerged that Drayson donated ? …