U.S. backs vaccines for drug, nicotine addiction

* Drug abuse chief eyes vaccines as new treatment option

* Nicotine vaccines could reach $2 billion market by 2016

By Julie Steenhuysen

CHICAGO, Oct 20 (Reuters) - Hooked on cocaine or cigarettes? The U.S. government wants drug companies to make a vaccine for that.

Convinced of the need for new and better treatments for addiction, the government is focusing its efforts on vaccine development as a new way to treat and possibly prevent addiction to a range of addictive substances.

"It's a perspective that is very different from what we've operated on in the past," Dr. Nora Volkow, director of the National Institute on Drug Abuse told reporters this week at the Society for Neuroscience meeting in Chicago.

Volkow said the agency intends to piggyback on the frenetic investment by drug companies in vaccine development, spurred by the need for new products and the runaway success of products like Merck's (MRK.N) Gardasil vaccine to prevent the virus that causes cervical cancer.

"There is an enormous amount of research and development in vaccines for cancers and a wide variety of disorders," she said. "We can take advantage of those developments."

But first Volkow has to tempt drug companies to develop the vaccines by funding costly clinical trials.

Earlier this month, her agency, part of the National Institutes of Health, awarded Nabi Biopharmaceuticals (NABI.O) a $10 million grant -- the agency's largest ever -- for a late-stage clinical trial of Nabi's vaccine for nicotine addiction called NicVAX.

Volkow said she did her homework before backing the Nabi vaccine to ensure it was significantly different from other products. "Nonetheless, when you are investing in something at this level, it can be very risky," she said.

The vaccine is meant to stimulate the immune system to make antibodies against nicotine, blocking its rewarding effects and helping to prevent relapse in smokers trying to quit.

TOUGH MARKET

A similar anti-smoking vaccine by Cytos Biotechnology (CYTN.S) and Swiss drugmaker Novartis (NOVN.VX) last week missed its main goal in a midstage study, leading some analysts to question whether it can make it to market.

"They are still looking at it but it has been very problematic," said Robert Wasserman, director of investment research at the investment banking firm Dawson James in Florida.

"Vaccines are really tough," he said. "It's not for the faint of heart."

Still, if it works, a nicotine vaccine could have a huge impact, Volkow said. "It's an international problem that kills 5 million individuals every year across the world," she said.

The global market for smoking cessation is expected to reach $4.6 billion by 2016, and vaccines could account for $2 billion in sales, according to independent market research firm Datamonitor.

Volkow said the same methods for making a nicotine vaccine could be used for other illicit substances.

Her agency backed a study released this month of an anti-cocaine vaccine that helped block the high felt by 38 percent of addicts who took it.

The vaccine was developed by Dr. Thomas Kosten of Baylor College of Medicine in Houston, who used a similar approach to make a nicotine vaccine now being tested in Europe by private equity firm Celtic Pharma.

Volkow said drumming up drug company interest in vaccines for illicit drugs is a harder sell because of liability concerns, and the fact that drug abusers are stigmatized.

"Unfortunately, when it comes to treatments for drug addiction ... most of the investment goes to the government," she said. (Editing by Mohammad Zargham)