Cangene is awarded US$362 million supply contract by U.S. government for anti-botulism drug

06-Jun-2006

Cangene has been awarded a five-year development and supply contract by the U.S. Department of Health and Human services ("HHS") for 200,000 doses of botulinum toxin immune globulin (Heptavalent botulism Antitoxin) that will be available to treat individuals who have been exposed to the bacteria and/or the toxin that cause botulism. The Project BioShield base contract is valued at US$362 million. The Company has already begun development work on the project under an earlier research and development contract with the U.S. Centers for Disease Control and Prevention. Under this new contract, Cangene will begin to receive payment once it has produced and delivered a quantity of "usable product" to the U.S. Strategic National Stockpile. The Company expects to meet this milestone from mid to late 2007. The contract also requires that the Company apply for and receive licensure from the U.S. food and Drug Administration ("FDA") for use of this product. Cangene will apply for accelerated approval and Fast Track review.

To meet the "usable product" requirement, the product must be manufactured under licensable conditions and meet certain safety and regulatory conditions. Once FDA licensure is received, the Company may receive a supplemental payment. In addition to the base contract, there is a possibility that optional task orders worth up to US$234 million may be awarded at the government's discretion.

These tasks include ongoing testing to support long-term product shelf life, maintaining product manufacturing, and additional clinical testing in special populations. Cangene will manufacture the product at its Winnipeg facility but will use its U.S. subsidiaries and other U.S. companies for all key subcontracting activities.

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