U.S. to Pay Firm $11M After Vaccine Deal Canceled

The U.S. Health and Human Services Department has agreed to pay California biotechnology firm VaxGen Inc. $11 million after canceling a contract to produce 75 million doses of a new anthrax vaccine, the Silicon Valley/San Jose Business Journal reported yesterday (see GSN, March 17).

Under the settlement, both the agency and the company are released from any liability related to VaxGen’s contracts with the government.

VaxGen received two developments contracts for an anthrax vaccine from the National Institute of Allergy and Infectious Diseases, along with the $877.5 million Health and Human Services production contract in November 2004.  The 2003 NIAID contract is terminated under the settlement, and the HHS cause for ending its contract in December was switched from a termination for default to a termination for convenience, the Business Journal reported.

The company was two years behind schedule to deliver the vaccine when the contract was canceled.

Payment to VaxGen is expected within 30 days (Silicon Valley/San Jose Business Journal, April 5).

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