But before the government purchases any “anti-terror” products, the items must pass safety and immunogenicity testing in humans, as well as challenge in two animal models. These criteria, although essential for safety and efficacy, raise a number of major issues and concerns for any company interested in participating in Project BioShield. For example, why invest large amounts of resources and capital toward the development of a product that has little commercial value and essentially one potential customer — the U.S. government? The development of a vaccine is an expensive endeavor, costing millions of dollars and years of development. And the market upside is relatively limited. Furthermore, some companies already have a head start on the development of drugs and vaccines via federal funds from the NIH, the DoD, and the Defense Advanced Research Projects Agency (DARPA), for example, potentially giving them an unfair advantage.

Despite the fiscal challenges of developing a new drug, many biopharmaceutical companies are eager to obtain biodefense funding for anti-terror product development for two reasons: patriotism and dual-purpose research. The former is laudable, but patriotism does not produce profits, leading some bottom-line-focused companies to use federal funds for the development of highly related, or dual-purpose, research projects. Some companies may use federal funds to develop both a “patriotic” but less profitable product and, at the same time, a commercially viable product.


Lingering Questions
BioShield funding is unique since it awards money to companies after the product has been developed. Thus, companies must fund their own R&D efforts, including preclinical and clinical tests. Interestingly, the required testing in humans and animals raises another concern: What if the BioShield product doesn't protect the animal model from disease or is found to be immunogenic in humans? Negative data may disappoint the company, but how will the company's investors react? Negative results will affect the stock price or investors’ attitudes toward the company. Is it, therefore, worth the risk to develop a “patriotic” drug or vaccine that may adversely affect the stock price? And if so, should companies developing BioShield products be granted indemnity for those specific programs?

Another concern over Project BioShield is raised by Una Ryan, CEO of AVANT Immunotherapeutics, which is developing a next-generation anthrax vaccine. "What if a company develops an improved anthrax vaccine before ours, but it does not possess all of the advantages as AVANT's? What happens to ours?" AVANT is developing a single, oral-dose "sip-and-go" combination anthrax-plague vaccine that is temperature stable and provides immunity in days instead of the current multiple-dose anthrax vaccine that may take months. The advantages of AVANT's vaccine may be clear, but others will find themselves in a similar position. Will more than one company be awarded contracts for similar products, or is the first one to the finish line the only winner?

Several other key questions remain. Since many companies already receive funds from federal sources for various biodefense projects and have close ties with government agencies, how fair will the RFA process be? And what guarantees exist that anti-terror products developed will be purchased?

Despite the uncertainties, an estimated 100 biopharma companies are developing anti-terror technologies. The passage of Project BioShield is an important development for the safety of American citizens that provides a significant impetus for drug and vaccine research. That said, Project BioShield might have adverse effects on struggling companies. Given the magnitude of this program and the lingering questions concerning its implementation, it is no surprise that researchers and legislators are refining the program and hope to create a BioShield II in the near future.

Zachary Zimmerman is a senior research analyst at Life Science Insights. E-mail: zzimmerman@idc.com.