Pfenex Signs $143.3-million, Five-year Deal with US Department of Health and Human Services

Pfenex (NYSEMKT:PFNX), a clinical-stage biologics company that develops hard-to-manufacture proteins and biosimilar therapeutics, announced a deal with the US Department of Health and Human Sciences’ Biomedical Advanced Research and Development Authority.
The five-year contract, announced on August 17 and valued at approximately $143.5 million, will support the development of Pfenex’s mutant recombinant protective antigen anthrax vaccine, Px563L.

Promise for the future

The contract is an exciting development for Pfenex as it will fund activities related to current Good Manufacturing Practice manufacturing of the drug, in addition to a Phase 1a clinical study. It also includes milestone-based option periods, such as the completion of a Phase 1b clinical study and a Phase 2 clinical study.
Elaborating, CEO Bertrand C. Liang stated in a press release, “this contract for the development of Px563L offers the potential for a dramatic improvement in the rapid production of large amounts of a high value stable recombinant anthrax vaccine for the U. S. Government.”
The company hopes that the successful completion of the contract will lead to a contract to supply the Strategic National Stockpile with Px563L. As Liang explained, “the ability to meet articulated medical countermeasure needs, including fulfillment of the requirements of the Strategic National Stockpile, is a key goal in the program.”
Investors have responded positively to the news. Pfenex’s share price opened at $19.88 on Monday morning, reaching an all-day high of $22.20. By market close, stock was valued at $20.83, representing a 7.65-percent increase.

Company snapshot

Pfenex is primarily known for its lead product candidate, PF582, which is a potential treatment for retinal diseases. The drug is biosimilar to Lucentis, the age-related macular degeneration treatment produced by Genentech, a wholly owned subsidiary of Roche (OTCMKTS:RHHBY). Pfenex is also working to develop a pipeline of product candidates using its Pfenex Expression Technology platform. These treatments span everything from biosimilars and vaccines to generics and next-generation biologics.
Pfenex’s Q2 results, released last Thursday, show that the company has been focusing heavily on research and development. The company increased its R&D spending by 320 percent in the three-month period ended June 30; that $2.7-million expenditure was primarily focused on the development of product candidate PF708, a peptide generic to Eli Lilly’s (NYSE:LLY) Forteo that is anticipated to enter a bioequivalence study in 2H15, and PF530, a biosimilar candidate to Betaseron, produced by Bayer Healthcare Pharmaceuticals (NASDAQ:AMGN). Pfenex also hired additional personnel to support this increased emphasis on R&D.
Encouragingly, the company has cash holdings that will continue to support this spending on drug development. According to Liang, “our net cash balance as of the end of the second quarter was approximately $123 million which positions us well as we continue advancing our pipeline of biosimilar protein and generic peptide candidates.” Investors will no doubt be interested to watch where this drug pipeline takes Pfenex in the second half of the year.
 

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