The five-year contract will see the biopharmaceutical company supplying 20 million doses of its smallpox vaccine, Imvamune to the Strategic National Stockpile for individuals to be considered "at risk", such as those who are immuno-compromised. The total deal with the US Department of Health and Human Services (HHS) could be extended to be worth $1.5bn, which would include further clinical studies to extend the license to include people infected with HIV, children and the elderly, as well as procurement of up to an additional 60 million doses of the vaccine. The contract is the first next-generation product procured by the HHS under the government's BioShield program, which was put in place following the terrorist attacks of 9/11 to guard against bioterrorism. Despite the World Health Organization (WHO) declaring the disease eradicated worldwide in 1980, with the last case of smallpox occurring in the US in 1949, there are concerns that should the virus get into the hands of terrorists, it could be used as a biological weapon with potentially devastating consequences. A highly contagious disease, smallpox kills about one-third of the people it infects. There is no treatment and the only prevention is vaccination. HSS secretary Mike Leavitt said in a statement: "To protect ourselves from the remote but extremely grave threat of a deliberate release of smallpox virus, we need vaccines that can be safely given to all Americans, including individuals with weakened immune systems. Acquiring a stockpile of this new smallpox vaccine is a key step toward protecting even more members of the American public against a smallpox release." The significance of the deal was the advanced formulation of the Imvamune vaccine compared to the vaccines currently stockpiled. Traditional vaccines contain live replicating vaccinia viruses, a relative of smallpox, which can pose serious side effects and complications in up to 25 per cent of the population, but Imvamune is expected to be much safer. Based on the Modified Vaccinia Ankara (MVA) virus, Imvamune also contains a live virus but a weakened form that does not replicate in the body and cannot be accidentally transferred to other people. The MVA vaccine could be used in immuno-compromised individuals, of whom there are an estimated 10 million in the US. Bavarian Nordic president and chief executive Peter Wulff said: "The US government wants a smallpox vaccine that is safe for all its citizens. Our patented technology is a third generation product and is a dramatic leap forward from the existing smallpox vaccines used or under consideration to be used today. "Our Imvamune clinical development program consists of 10 completed or ongoing trials, which have investigated the vaccine in persons who are immuno-compromised as well as healthy individuals. Results in more than 1500 persons (atopic dermatitis, HIV-infection and healthy subjects) vaccinated with Imvamune show that the vaccine was safe and well tolerated," he said. "Data from two of our ongoing trials will be pivotal to fulfill the requirements for the use of Imvamune during an emergency situation. Funds under this contract will also enable us to expand and expedite our clinical program for licensure of Imvamune with the US Food and Drug Administration (FDA)." This contract is also the first to receive advance payments as milestones in development and production are reached, with $125m being paid in 2007 and 2008. In 2006, the Denmark Government approved the large-scale commercial production of Imvamune at the facilities there, which has the capacity to produce a minimum of 40 million doses of Imvamune per year, with the capacity to be expanded to 180 million doses per year. Also last year, a collaboration was established between Bavarian Nordic and authorities of an undisclosed South East Asian country with an interest in protecting its military personnel. Earlier this year Bavarian Nordic's claims against UK biotech company Acambis were dismissed by the Federal District Court of the District of Delaware. The Danish company had claimed a sample of Imvamune had been supplied to Acambis for "research purposes" but had been reproduced into a smallpox vaccine, for which Acambis was seeking approval in the US.