acambis, acm

the fortunes of this smallpox vaccine company changed after 11/9 upon receiving 500m contract from the usa army to supply it with smallpox vaccine. the stock stood at 120p before it hit the roof at just under 400p early year 2002 gapping as it rose by some 90p that was accompanied with a mighty volume spike of 12m (average daily volume is well below the 1 m mark, today stood at near quarter a million most of which has been buy trades, yet the stock managed to stage another dropping day! someone must have something cooking here!)

there is news now that the usa intends to have all its citizens vaccinated against smallpox. meanwhile the company has stated that it expects to report top end revenue when it posts its preliminary figures by march 11.

you would expect the share price for acm to be racing, but it aint so. in fact the opposite is true. over the past 5 trading days the share price has dropped on every day that culminated with the biggest of such drops today, 4.2% to take the stock to 227.5! the top of the support zone of 223-227. the spread has been 4%, reasonable for a stock of this nature.

9 and 18 days smas both heading down rather steeply. the 150 ema has plotted a shallow saucer shape, now at the rim which is flat. 9 day sma has just crossed over the 150 ema having had just crossed over the 18 day sma earlier on. so there is some downside forces left in the stock.

rsi commenced its rise from near the bottom. slow stochs ranging flat at the bottom. macd histogram had bottomed up and begun to rise when these series of price drops commenced 5 trading days ago. so we have divergence.

apart from the moving averages, the other negative aspect is the m formation that straddles august and mid september last year.

this stock should be on every canny traders watch list. has the potential to explode up starting with one mighty up gap to take it back to its previous high and beyond.

Thought I'd do a little background reading on smallpox vaccination programmes and came up with this link.

It's certainly food for thought although I'm generally a conspiracy theory sceptic.

There may or may not be a conspiracy theory....

But the ACM share price was knocked last month on news that Vaxgen, a company developing vaccines for HIV and anthrax, had acquired development rights for use in the US of a smallpox vaccine from Kaketsuken of Japan. They said clinical trials of the LC16 vaccine were expected to start early this year, and it could be accepted for use in the US by 2004 - and the implication was that this represents genuine competition for Acambis.

It doesn't, of course.

One of the more comprehensive reports on this news is in a Dow Jones story.

http://smartmoney.com/bn/ON/index.cfm?story=ON-20021217-000619-1415

Strangely, the Chemo-Sero-Therapeutic Research Institute - i.e Kaketsuken - seems to have no mention on their website of smallpox.

http://www.kaketsuken.or.jp/info/history_e.html

There's also a good article in the New York Times on the Acambis/VaxGen news.

http://www.nytimes.com/2002/12/18/science/sciencespecial/18VACC.html

I hadn't realised that the 50,000 Japanese children referred to in the VaxGen stuff were actually vaccinated in the 1970's - I wonder why that wasn't mentioned....??!!

However - as I understand it, the Japanese vaccine has previously been discredited by the World Health Organisation. It's also interesting that the Vaxgen chap, Lance Gordon (who now knocks Acambis) used to work for a subsidiary of Acambis and was actually part of the team that negotiated and won the original smallpox contract with the US Government. (Come back conspiracy theory - all is forgiven...!!)

Lance Gordon is quoted in the NY Times article as saying that he had been working on spurring interest in the Japanese vaccine for four years, and that the Acambis vaccine, while produced with more modern methods than the existing vaccine, would not be much safer because it used the same strain of virus. He also said that its risks would be acceptable if there were a bioterror attack, but that in the absence of an attack, "it's certainly likely that the adverse events will outweigh any risks from smallpox."

This is a bit from the RNS at the time (and bear in mind that Peptide was taken over by Acambis, but for some strange reason Lance Gordon seemed to have lost his job).

Cambridge, UK - 20 September 2000 - Peptide Therapeutics Group plc ('Peptide')
(LSE:PTE) announces today that its US subsidiary, OraVax, has been awarded a
contract from the U.S. Centers for Disease Control and Prevention ('CDC') to
develop and manufacture a new smallpox vaccine.

The contract is for a defined period of 20 years. The total amount of the
contract is estimated at $343 million. The vaccine will be used to create a US
national stockpile for the purpose of countering the threat of bioterrorism.

The new smallpox vaccine will be based on the same vaccinia virus strain that
was licensed in the U.S. and used for routine immunization against smallpox
prior to the global eradication of smallpox in the 1970s.

(...)

Lance Gordon, Peptide's Director, North America, said:

'This is a major contract which confirms Peptide's leadership in the
development of live virus vaccines. It is a clear endorsement of our
technology by no less than the US government and has the potential to earn
very substantial revenues for Peptide's shareholders.'

http://www.uk-wire.co.uk/cgi-bin/articles/200009200701102193R.html

Merrill Lynch didn't help either a couple of weeks ago, when they initiated coverage of Acambis with a "sell" recomendation and a 220p price target, saying that they forecast ACM be profitable from 2002 to 2004 thanks to its contracts to supply over 200m doses of smallpox vaccine to the US - but forecast Acambis to turn loss-making in 2005, due to a revenue gap prior to launch of any other significant vaccine products. While seeing Acambis "as a proxy for bio-terrorist risk", the broker advised clients to sell into any potential price gains, "because it is fundamentally overvalued". Okay - but profitable for the next 3 financial years...?? Sounds good to me.

We have yet to see the full year results for 2002, obviously - which are due to be announced on March 11 - but in yesterday's trading statement ACM stated that revenue from the second smallpox contract would represent around $90m in this financial year.

http://www.uk-wire.co.uk/cgi-bin/articles/200301270700406351G.html

The second smallpox contract...??

Okay, there were two contracts in place with the US Government. There was an update in the recent Q3 results.

"As we stated previously, the reported level of revenue in each period is significantly affected by the timing of deliveries of the final vaccine product to the CDC. Our previous guidance in respect of the level of revenue the Group anticipated recording in 2002 from our second smallpox vaccine contract with the CDC was between $100m and $140m for 2002 and between $210m and $250m for 2003.

Recently there was a short delay in in-process batch testing. Whilst this issue has now been resolved, and action has been taken to avoid any future delays, including securing additional testing capacity, this will cause some revenue to move from 2002 to 2003. We now expect the revenue range to be between $70m and $90m in 2002 and between $250m and $290m in 2003. We still anticipate total contract revenue receivable of $428m and for profit margins to be in accordance with previous guidance."

http://www.uk-wire.co.uk/cgi-bin/articles/200211250700442046E.html

This seems pretty clear - and I believe that the "short delay in in-process batch testing" was because of capacity restraints at a third party testing facility, and not a problem directly attributable to Acambis.

The first smallpox contract - incidentally - dates from September 2000 as disclosed in the RNS I quoted above. It originally required 54 million doses of vaccine in 2002 with a $343m headline figure that was put on the contract at the time it was awarded. This was a cost-plus contract and any such contracts required the government to attach an expected expenditure figure. The $343m included $50m for R&D; the rest (i.e. c.$290m) related to manufacture and maintenance of a stockpile and was dependent on an assumed price and shelf life, neither of which was definitively fixed but would be agreed as and when ACM started manufacture. Of course, that all changed on September 11. The number of doses required was increased from 40 million to 54 million and the timeline was been brought forward from 2004 to 2002. The only guidance the company gave was that they were expecting around $1 a dose for those 54 million doses. Clinical trials were being paid for on a cost-plus basis, with a standard government margin of around 12%.

And let's not forget that Acambis has a wide portfolio of products - they are not dependent on the smallpox vaccine alone. Their product pipeline includes Yellow Fever, Dengue Fever and West Nile Virus - to name but a few.

So current projections.... well, Evolution Beeson Gregory predicts Acambis will see pre-tax profits rise from 2.4m (earnings 2.4p) this year to 51.1m (36.8p) next year. Teather & Greenwood projects 2.1m (2.1p) for 2002, and 54.5m (43.5p) for 2003.

For what it's worth, I think Acambis is seriously undervalued at present. I am already a holder and - if it were not for my pessimism about the markets in general - I would be adding substantially at these levels.



T22

titanium22,

thank you for your comprehensive posting.
the stock is down today! the time will soon be upon us when this stock would rise convinsingly so much so that you would be drawn in for a profitable top up!

If the US starts actually using the vaccines (which the should as they do have a "use by date" )they will need to order more and more as they only provide protection for 3 years.

(Am I the only person old enough to remember constantly be re-immunised because my vacination certs were only valid for 3 years and it was a requirement until the early 80's for those of us who got to do a lot of travelling with parents who liked to work in exotic locations!)

Also there the news that the UK have ordered from powderject instead of Acambis - but so what - the population of the UK is small fry compared to the US!

Am I the only person to have missed this - On 17 Dec 02!

LONDON (AFX) - Acambis PLC said finance director Gordon Cameron has sold 30,273 shares at 2.63 stg per share and now holds 163,849 ordinary shares, representing 0.17 pct.

newsdesk@afxnews.com

- A couple of days before year end? Although he only sold 15% of his total holding, did he know something?

Having said that, he may have just needed the cash - I have in the past purchased shares soon after the FD/MD sells and the price dropped big time, only to make a massive profit (100 - 250%!) within a year, because the FD/MD needed the cash and the company was actually doing really well!

acambis moved up over 6% yesterday and opened slightly up this morning.so the drive higher may have just started!

Before we all forget about this one - info released 3 days ago

Acambis PLC
25 February 2003

Acambis wins $9.2m US Government contract to develop MVA vaccine

Cambridge, UK and Cambridge, Massachusetts - 25 February 2003 - Acambis plc ('
Acambis') (LSE: ACM, NASDAQ: ACAM) announces that its US subsidiary, Acambis
Inc., has been awarded a $9.2m contract by the National Institute of Allergy and
Infectious Diseases (NIAID), part of the US National Institutes of Health, to
develop a new Modified Vaccinia Ankara ('MVA') vaccine.

MVA is a weakened form of the current generation of smallpox vaccines and, as
such, should allow the safe inoculation of 'at risk' people with weakened immune
systems, who would otherwise be unable to be vaccinated against smallpox.

The contract requires Acambis to develop a new MVA vaccine, deliver several
thousand doses of the vaccine to NIAID and conduct a Phase I clinical trial in
healthy adults. The contract is structured on a 'cost plus fixed fee' basis. For
this contract, Acambis has partnered with Baxter Healthcare Corporation, its
major shareholder and strategic partner. Acambis is acting as the prime
contractor and Baxter as sub-contractor, leveraging each other's strengths and
capabilities. Acambis expects to hold the exclusive commercial rights to the MVA
vaccine.

The NIAID can award additional funds under the contract for expanded Phase II
clinical trials in healthy adults and Phase I and Phase II studies in 'at risk'
populations. The estimated value of Acambis undertaking the work required by
this additional element is $26.5m.

In addition, the US Government has declared its intention to stockpile MVA
vaccine. The NIAID plans to issue a Request for Proposals for the production of
up to 30 million doses of MVA vaccine constituting the US Government's stockpile
for emergency use.

Under contracts dating from September 2000 and November 2001, Acambis is also
producing smallpox vaccine for the US Government as part of programme to produce
a stockpile sufficient to provide a dose for every man, woman and child in the
US.

Dr John Brown, Chief Executive Officer, said:

'We recognise the importance of MVA as a product that complements our existing
smallpox vaccine.

With the addition of MVA to our ACAM2000 vaccine, we have established a vaccine
franchise that enables us to offer governments the package of products they need
to protect all their people against smallpox.

'Winning this first contract puts us in a great position to tender for the
second contract to supply the US Government's MVA stockpile,' Dr Brown
commented.

Acambis PLC
18 February 2003



Notification of conference call and webcast

Cambridge, UK and Cambridge, Massachusetts - 18 February 2003 - Acambis plc
('Acambis') (LSE: ACM, NASDAQ: ACAM) will announce its preliminary results for
the year ended 31 December 2002 on Tuesday, 11 March 2003.

The results announcement will be released at 7.00 am GMT. A conference call for
analysts will be held at 9.30 am GMT. For details, contact Mo Noonan at
Financial Dynamics on telephone number +44 (0) 20 7269 7116. An instant replay
of the call will be available until midnight on Tuesday, 18 March on the
following telephone numbers: UK: +44 (0) 20 8288 4459; US: +1 334 323 6222. The
pin code is 416402.

An audio webcast of the call will also be available via Acambis' website at

www.acambis.com.
The webcast replay will be available until midnight on Tuesday,
11 April.

With the terror alert' test' in London soon, does this mean that the Gov't will be proactive and buy small pox doses for the entire popluation. Looks like its just 20 million so far, a bit similar to the number of labour voters:)

From memory the UK government aren't getting their stocks from Acambis, but from Powderjet. If you remember there were accusations that powderject got the contract over acambis because powderject gave a large donation to the labour party.

The thing is the UK order is small fry compared to the US order and other US orders

Results due out this week - should make things interesting

Judging from this Saturdays FT article there could be a silver lining to Acambis losing their court case with BTG. It apparently removes uncertainty, and opens the way for a bidder to step in. I like the notion of a racy takeout price.

Acambis left vulnerable after BTG settlement

Acambis has settled a legal dispute with BTG, the intellectual property group. But the deal makes Acambis, one of the UK biotechnology industrys few recent successes, more vulnerable to a takeover.

In an out-of-court settlement, BTG is understood to have agreed to receive the relatively small sum of 12m from Acambis now, rather than run the risk of having to negotiate with any large acquirer of the vaccine-maker in the near future.

Some close to the dispute said One hears the company is up for sale and thinking of quite a racy takeout price, although Acambis sources strongly denied this.

They said the company, which has more than 100m cash after supplying smallpox vaccines to the US government, may attract interest because of its strong balance sheet and valuable assets, but was not seeking buyers.

The company is also vulnerable because of the recent decision by CE John Brown to step down. Russel Reynolds, the headhunter, has been hired to find a successor. Rolf Stahel, ousted last year as CE of Shire Pharmaceuticals, is understood to have been approached.

Genghis Lloyd-Harris, CSFB analyst, said the settlement of the dispute about whether Acambis was contractually obliged to pay BTG 2% of its turnover increased its value to bidders by removing uncertainty. He said The CEO is stepping down with no announced successor, its high quality assets are significantly undervalued, and M&A consolidation is picking up.

Bidders could include Akzo Nobel, which this week said it was looking to break into the human vaccine market. Others could include Merck, Aventis, Wyeth and GlaxoSmithKline.

If 290 support goes you'd best get the bin bags. Woof!!!!

interesting last comment from 3 years ago !!

Anyway stock has been trashed deservedly so -- some big seller around but seems to be meeting buyers today ahead of a ruling due tomorrow

ruling likely to positive for acm -- expect bounce tomorrow

ruling delayed -- bounce more unlikely short term?

but bid moving up !1

:-)



UPDATE 1-Acambis agrees 276 mln stg bid from Sanofi Pasteur
AFX


LONDON July 25 (Reuters) - Vaccine maker Acambis Plc said on Friday it had agreed to a takeover offer from Sanofi Pasteur that values the British company at around 276 million pounds ($547.8 million).

Acambis said the bid from Sanofi Pasteur -- a unit of Sanofi Aventis, the world's third-largest pharmaceutical company -- was at 190 pence in cash for each Acambis share.

Shares in Acambis, which in April won a 10-year contract worth $425 million to supply the U.S. government with smallpox vaccine, closed 0.9 percent higher at 116 pence before the news.

'This mutually beneficial acquisition is a logical step building upon Sanofi Pasteur and Acambis' decade long partnership on key projects to develop and market vaccines of the future,' Wayne Pisano, Chairman, President and Chief Executive Officer of Sanofi Pasteur, said in a statement.

Acambis Chairman Peter Fellner welcomed the offer, which was at a 62.5 percent premium to where the stock ended on Thursday.

'Sanofi Pasteur, which is one of the world's largest vaccines companies, will benefit strategically not only from Acambis' pipeline and technologies, but also from its significant U.S.-based R&D and manufacturing infrastructure,' Fellner said.

(Reporting by Mike Elliott; Editing by Quentin Bryar) ($1=.5038 Pound) Keywords: ACAMBIS SANOFIPASTEUR/

tf.TFN-Europe_newsdesk@thomson.com