In an interview, Hauer said he lobbied members of Congress and advised the company how to "educate" the administration. He said he changed his mind about Emergent's vaccine after concluding that he had relied earlier on "biased information" from his then-colleagues at HHS.
In the spring of 2005, VaxGen became more vulnerable to its rival's onslaught. VaxGen scientists determined that the problem with the new vaccine's potency was not the result of a lapse in refrigeration, as they had first speculated. The difficulty lay with the vaccine's formula. An aluminum additive, expected to increase potency, had the opposite effect.
"Our vaccine had a stability problem," said Dr. Marc J. Gurwith, a scientific executive with VaxGen. "The problem was going to take more testing to figure out what went wrong and how to fix it."
VaxGen needed patience and flexibility from its presumed allies in Washington. But Thompson had resigned as HHS secretary, and Emergent's lobbying had changed the atmosphere. Officials who had backed VaxGen's drive to deliver a better vaccine were no longer responsive.
"We had a very productive partnership with the government until we encountered a problem," said Piers Whitehead, VaxGen's vice president for corporate and business development. "Things deteriorated very rapidly."
In April 2005, Dr. Noreen A. Hynes took over the HHS office that oversaw development of new drugs and vaccines under Project BioShield. Hynes, previously a bioterrorism advisor in the White House, said she was concerned about whether any small company could shoulder the costs of developing a new vaccine.
The Project BioShield law allowed advance payments of up to 10% of the value of a contract. But when she sought permission to grant such payments, Hynes said, she was turned down.
"I was told that the administration had decided there would be none," Hynes said in an interview. Asked who made the decision, Hynes said that she did not know but that it flowed from "the highest level."
Hynes, an infectious-disease specialist now at Johns Hopkins University, added: "It was not surprising, frankly, that this new type of vaccine would have been delayed in development. That's just the way vaccine development is. . . . It's one of the reasons why you would want to have the advance-payment authority."
