Novavax in talks with "half dozen" countries-CEO

* Countries drawn to quicker, cheaper vaccine, CEO says

* Method 80 percent cheaper than egg-based flu vaccine

CHICAGO, Sept 8 (Reuters) - U.S. biotech company Novavax NVAX.O is in discussions with officials from several different countries looking for quick ways to make flu vaccines to protect their populations from swine flu and other potential pandemics, the company's chief executive told Reuters.

“We’re talking with at least half a dozen countries if not more,” Novavax Chief Executive Rahul Singhvi said in a telephone interview.

Although the clinical-stage biotechnology company does not expect to have a flu vaccine approved for use in the United States until 2012, it has already signed a licensing deal with Spanish drugmaker RoviROVI.MC and started a vaccine joint venture with Indian drugmaker Cadila Pharmaceuticals.

The World Health Organization predicts a third of the world’s population -- roughly 2 billion people -- will eventually be infected with the new H1N1 virus, and has warned there is not enough production capacity to make vaccine for everyone.

Singhvi said the H1N1 pandemic has been a wake-up call for many governments who rely on foreign suppliers for flu vaccines. “A lot of these countries are finding out it is better to have control of vaccine supply within their own borders,” he said.

He said the Rockville, Maryland-based company’s technology, uses engineered bits of genetic material called virus-like particles or VLPs that mimic a flu virus. Vaccines based on VLPs can be made more cheaply in about half the time of old-fashioned vaccine methods, which use specially grown chicken eggs, Singhvi added.

Investors have embraced the stock. Since April, when the new H1N1 strain emerged, Novavax shares have risen more than 1,000 percent. The shares were up 29 cents in Tuesday’s mid-afternoon trade on the Nasdaq to $5.81, up more than 1,000 percent off its 52-week low of 52 cents on April 2.

Some analysts, including Oppenheimer, cut their ratings on the company’s stock to “perform” from “outperform” last week.

“They think the stock went up too much too fast,” Singhvi said. “I think they’re wrong, but that is for us to prove.”


Several companies are working on vaccines that use similar technology. Novavax grows them in caterpillar cells, which are harvested and purified. The process is done in disposable, ready-to-use equipment.

While no flu vaccines made this way are licensed yet, VLPs have been used to make Merck & Co Inc's MRK.N cervical cancer vaccine Gardasil, which has been used in more than 7 million girls and women.

Singhvi, a former Merck vaccine researcher, estimates it could cost 80 percent less to build plants to make his VLP flu vaccine than conventional egg-based manufacturing facilities.

“That has been attractive to other countries, and other companies in other countries, not only because it’s cheaper, but also because the technology transfer is simpler,” he said.

Developing a pandemic vaccine has been the company’s focus since 2005, when it began making a vaccine for H5N1 avian flu. “This is not something we just started dabbling in because flu became a sexy thing,” Singhvi said.

The company’s seasonal flu vaccine has been through two rounds of mid-stage testing in humans. The company hopes to test its seasonal flu vaccine in the elderly this fall.

“We demonstrated our capability in this current pandemic by making H1N1 -- the novel swine flu strain -- within 4 weeks of identifying the strain and sent that to the CDC for testing,” Singhvi said.

Those tests showed the vaccine protected ferrets -- which get human-like flu.

Novavax will seek approval to start human trials of its H1N1 vaccine in the fourth quarter, and it hopes to start late-stage trials in 2011. “The earliest we could get on the market would be 2012. That is under standard licensing conditions. But these are not standard times,” Singhvi said.

“If the pandemic becomes very severe, I think whatever would need to be done, the U.S. government would do,” he added, saying that other countries have expressed interest in a faster approval process. (Editing by Maggie Fox, Leslie Gevirtz)