VaxGen to Receive $11 Million Under Settlement With HHS

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VaxGen announced last week it has signed a settlement agreement with the U.S. HHS that releases both parties from all liabilities associated with the company's government contracts to develop and deliver a next-generation anthrax vaccine.

As part of the settlement agreement, the NIH's National Institute of Allergy and Infectious Diseases (NIAID) has agreed to pay VaxGen $11 million under a development contract awarded to the company in September 2003.

The settlement applies to all of VaxGen's anthrax vaccine contracts, including two development contracts awarded by NIAID in 2002 and 2003, and an $877.5 million vaccine stockpile contract awarded by HHS in November 2004.

Earlier this year VaxGen announced that HHS terminated the contract, under which the company was to provide 75 million doses of anthrax vaccine. The company also said it would cut 51 percent of its work force as part of restructuring efforts.

The contract cancellation came after the Dec. 18, 2006, deadline expired for VaxGen to meet the FDA's conditions for the agency to lift its clinical hold of the company's planned clinical trial for the vaccine, rPA102. The agency imposed the hold until the company could demonstrate that the product was sufficiently stable for clinical testing to resume.