Cangene wins $61m extension to BARDA supply deal
Canada-based Cangene won the $362m (EUR246m) supply contract in 2006. The Biomedical Advanced Research and Development Authority (BARDA) has now chosen to exercise some of the $234m worth of extensions included in the original deal.
"This is an extremely positive step. Not only does this significantly increase the total revenue value of this contract, it also indicates that BARDA is adopting a strategy of extending these types of contracts to replenish supplies of biodefence products”, said Michael Graham, acting president and CEO of Cangene.
Additional work under the extended contract primarily covers plasma collection over the next three years. Further stability studies and licensure-related work will also be done by Cangene. BARDA could further extend the deal to have the plasma fractionated or used in bulk product manufacture from 2012 to 2016.
Cangene says it has already received $200.1m in revenue from the contract. When signed the contract was worth $362m, with optional extensions valued at up to $234m. Inking the extension increased the total contract value to $423m.
Extended timeframe
BARDA also extended the deal's timeframe. The remaining 80,000 doses, from the original agreement for 200,000 products, must now be produced by 2018, with much of the stock being delivered in the last two years of the contract.
“While the extended delivery schedule spreads the revenue associated with this part of the contract over a greater period of time, it ensures a more predictable revenue stream over the upcoming years”, said Cangene.
Under the original contract Cangene received payment once it produced and delivered a quantity of "usable product" to the US Strategic National Stockpile. To meet the "usable product" requirement, the product must be manufactured under licensable conditions and meet certain safety and regulatory conditions.
