Federal health officials yesterday scuttled the largest piece of the Bush administration's two-year program to counter bioterrorism, canceling an $877.5 million contract with VaxGen to develop an anthrax vaccine after the company missed a deadline to begin human testing.
The decision, delivered in a one-page letter, ends a troubled effort by the small California firm that has come to symbolize the failures of the government's ambitious $5.6 billion Project BioShield. The termination occurred on the same day President Bush signed legislation attempting to salvage the program by reorganizing its management and pumping more money into firms doing the work.
[..]The cancellation means the government will continue to depend on a controversial anthrax vaccine, used by the military and made by Emergent BioSolutions of Gaithersburg, years longer than expected.
[..]VaxGen was picked for the project in 2004 despite having never successfully produced a drug. It was known for a failed attempt at an AIDS vaccine, and the company has had accounting and management problems, which caused it be delisted from the Nasdaq Stock Market.
In signing on to develop an anthrax vaccine, the company agreed to meet the government's aggressive timetable, producing a drug in five years, half the industry standard for such a product. VaxGen was to be paid as it began delivering the 75 million doses to the government, enough for 25 million people, roughly the equivalent of the population in the New York and Washington areas combined.