VaxGen had been working for two years on its anthrax vaccine, building on earlier efforts by the Army. VaxGen's early work had impressed Fauci's staff, which oversaw $100 million in federal research grants to the company.
Now VaxGen wanted to win the first BioShield contract. The company had been formed in 1995 by scientists from Genentech Inc., which retained an ownership stake. Lance K. Gordon, inventor of the first vaccine for infant meningitis, became VaxGen's chief executive in 2001.
But by 2003, the company's survival was in doubt. It had seen an experimental AIDS vaccine fail in late-stage testing. And in August 2004, the Nasdaq stock exchange delisted VaxGen for failing to file timely financial results; the company's stock price sank 35%.
VaxGen sought the BioShield contract by proposing to genetically engineer an anthrax vaccine with greater purity, more consistent potency and fewer unwanted side effects than Emergent's old vaccine.
But inside the company's salmon-colored walls facing San Francisco Bay, technicians were seeing disquieting data: Blood samples drawn from study patients showed that the vaccine failed to trigger enough anthrax-fighting antibodies.
VaxGen hired more vaccine experts, including a new chief scientific officer.
The complication did not deter federal health officials. On Nov. 4, 2004, HHS Secretary Thompson announced that VaxGen had been awarded the BioShield contract, worth $877.5 million. The money would start to flow when the company made its first delivery of vaccine, expected in two years.
"Acquiring a stockpile of this new anthrax vaccine is a key step toward protecting the American public against another anthrax attack," Thompson said.
The announcement was bad news for Emergent, whose vaccine remained the only revenue generator for its BioPort subsidiary.
"We were worried about it," recalled retired Navy Adm. William J. Crowe Jr., a former chairman of the Joint Chiefs of Staff who served on the company's board from 1998 through late 2005. (Crowe was interviewed at a hospital in Virginia in late August, two months before his death at age 82.)
BioPort was founded in 1998 by Ibrahim El-Hibri, a Lebanese financier. Along with Fuad, his U.S.-educated son, El-Hibri formed BioPort by purchasing vaccine-making facilities of the state of Michigan for $24.75 million. The company's only product was the anthrax vaccine, called BioThrax, which it sold chiefly to the U.S. military. In mid-2004, the company reorganized as Emergent BioSolutions.
