Investors in the pharma/biotech sector eagerly wait for pipeline updates as they play an important role in deciding whether or not to invest in a particular company. These updates provide information on experimental drugs and at times give an insight on the commercial potential of the candidate once it is successfully developed and commercialized.
Last week, NewLink Genetics Corporation (NLNK) and Merck (MRK) announced that the U.S. Department of Health and Human Services’ Biomedical Advanced Research and Development Authority (BARDA) has awarded a $30 million contract for their Ebola vaccine candidate, rVSV-EBOV. BARDA has given the contract to BioProtection Systems, a wholly owned subsidiary of NewLink, to support manufacturing and development activities related to rVSV-EBOV including a new phase Ib study (n = 330).
The candidate is currently being evaluated in phase I studies in several countries around the world.
Meanwhile, the U.S. National Institutes of Health intends to start a large randomized, controlled phase III study in early 2015 on the Ebola candidate along with another candidate that is being developed together by the National Institute of Allergy and Infectious Diseases and GlaxoSmithKline (GSK).
We remind investors that last month, Merck entered an exclusive worldwide license agreement with NewLink to research, develop, manufacture and distribute rVSV-EBOV. As per the agreement, Merck will have the exclusive right to the candidate along with any other follow-on product (read more: Merck Buys Rights to Ebola Vaccine Candidate from NewLink).
Our Take
The $30 million award from BARDA for developing rVSV-EBOV is encouraging. The funding provided by BARDA should expedite the development of the Ebola candidate. We note that several companies are developing Ebola vaccine candidates including Tekmira Pharmaceuticals (TKMR).
NewLink and Merck are Zacks Rank #3 (Hold) stocks. Tekmira is a better-ranked stock carrying a Zacks Rank #2 (Buy).
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