Cangene awarded contract to supply anti-anthrax drug to U.S. government

The company announced Friday that the U.S. Department of Health and Human Services has exercised its option to buy 10,000 doses of anthrax immune globulin under changes to an earlier development and supply contract.

The drug will be used to treat or prevent inhalational anthrax, an acute infectious disease caused by inhaling spores of the Bacillus anthracis bacteria.

The U.S. government has expressed concerns that terrorists might spread the virus in the United States to kill thousands of Americans in a terror attack.

Cangene said the value of this change to the so-called Project BioShield contract is about $143 million US and comes after successful preliminary testing done earlier.

The original contract was signed last September.

Cangene has already delivered a small number of doses under this contract into the U.S. Strategic National Stockpile but more deliveries will begin later next year and should be completed by the end of 2009.

Cangene said it will get paid following delivery of these additional doses. In addition, the contract also requires the company to apply for approval to sell the drug from the U.S. Food and Drug Administration.

"This is the second significant development in our biodefence development program in just two months," said Dr. John Langstaff, Cangene's president and CEO. "This segment of our business is really gaining momentum.

"Antibody-based products provide an alternative approach to the more traditional antibiotic treatments for anthrax and we are pleased to provide another key product for the biodefence effort."

Cangene will manufacture the drug at its Winnipeg plant but will use its U.S. subsidiaries and other U.S. companies for all key subcontracting work.

Cangene is one of Canada's largest biotechnology companies, producing drugs and providing contract research and manufacturing services through manufacturing plants in Winnipeg and Baltimore, Md.

Cangene shares were halted on the Toronto stock Exchange pending news of the contract. They last traded unchanged at $7.90.

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