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FDA News Boosts VaxGen Shares 21%

December 17, 2002|From Reuters

VaxGen Inc. said Monday that the Food and Drug Administration has agreed to an accelerated review of its experimental HIV vaccine -- news that sent the company's shares up 21%.

"This is a significant positive for VaxGen.... Once the applications are filed, the FDA can make a decision in fairly short order," said Anna Kazanchyan, an analyst at Investec Inc., which does not have a banking relationship with VaxGen.

On Friday, VaxGen said its shares had come under pressure after an article in the journal Nature questioned the effectiveness of its AIDSVAX vaccine.

The article said the HIV protein targeted by the vaccine is invulnerable to antibodies because it can change shape.

VaxGen spokesman Lance Ignon said that the experiment detailed in the article used artificial antibodies against an artificial virus and that the results cannot be compared with what happens with a natural HIV infection.

VaxGen is testing the vaccine for preventing HIV infection in a pivotal-stage, or Phase III, trial in 5,400 people in the United States, Canada, the Netherlands and Puerto Rico.

Shares of the Brisbane, Calif., firm rose $2.72 to $15.73 in Nasdaq trading, gaining back much of the 32% drop suffered last week. They had reached as high as $16.60 during the session.

The company said it expected to announce preliminary trial results in the first quarter of 2003. Another pivotal-stage trial of a vaccine version designed to fight HIV subtypes prevalent in Southeast Asia is being conducted in Thailand, and those results are expected in the second half of next year.

Under the FDA's fast-track program for drugs that treat life-threatening conditions, the agency must notify the company of the acceptance of the marketing application within 45 days of filing and must take regulatory action within six months, compared with one to two years for other applications.

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