Acambis: Can Smallpox Sustain?

Executive Summary

The UK's Acambis became one of a handful of European biotechs to post profits this year, boosted by a US government smallpox vaccine contract worth $428 million. The profitability label is a useful one these days: cautious investors find it easier to swallow R&D risk if accompanied by earnings. And Acambis' management has promised it can keep the company in the black, defying the skeptics. Near-term, it will leverage its smallpox franchise to secure further, and extended, government contracts. Beyond that, Acambis' pipeline of relatively low-risk products should start to come to fruition.