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Cangene Corporation Is Awarded US$362 Million Supply Contract By U.S. Government For Anti-Botulism Drug


5/31/2006 2:24:39 PM

TORONTO & WINNIPEG, May 31 /PRNewswire-FirstCall/ - Cangene today announces that it has been awarded a five-year development and supply contract by the U.S. Department of Health and Human Services ("HHS") for 200,000 doses of botulinum toxin immune globulin (Heptavalent Botulism Antitoxin) that will be available to treat individuals who have been exposed to the bacteria and/or the toxin that cause botulism. The Project BioShield base contract is valued at US$362 million. The Company has already begun development work on the project under an earlier research and development contract with the U.S. Centers for Disease Control and Prevention. Under this new contract, Cangene will begin to receive payment once it has produced and delivered a quantity of "usable product" to the U.S. Strategic National Stockpile. The Company expects to meet this milestone from mid to late 2007. The contract also requires that the Company apply for and receive licensure from the U.S. Food and Drug Administration ("FDA") for use of this product. Cangene will apply for accelerated approval and Fast Track review.

"We are very pleased that HHS has chosen to continue funding for Cangene to develop this important biodefence product," said Dr. John Langstaff, Cangene's president and CEO. "Botulinum toxins are one of the bioterrorist weapons that has been determined by the U.S. Department of Homeland Security to be a material threat to national security. Cangene has been working hard to develop a product that can help build an effective defence against this toxin and we look forward to continuing to work with HHS on this effort."

Under the contract, the price per dose will be a discounted fixed price. To meet the "usable product" requirement, the product must be manufactured under licensable conditions and meet certain safety and regulatory conditions. Once FDA licensure is received, the Company may receive a supplemental payment. In addition to the base contract, there is a possibility that optional task orders worth up to US$234 million may be awarded at the government's discretion. These tasks include ongoing testing to support long- term product shelf life, maintaining product manufacturing, and additional clinical testing in special populations. Cangene will manufacture the product at its Winnipeg facility but will use its U.S. subsidiaries and other U.S. companies for all key subcontracting activities.

Botulinum toxin is a nerve toxin produced by the bacterium Clostridium botulinum that causes a serious paralytic illness known as botulism. Naturally occurring cases are mainly seen in infants or adults who have consumed improperly processed foods. Botulism can also be used as a bioterrorist weapon and has been identified as one of the highest priority bioterrorism threats. Funding for this contract is being provided under the US$5.6-billion Project BioShield legislation.

About Hyperimmunes

Hyperimmunes are purified preparations of specific immune globulins isolated from blood plasma. Immune globulins are the class of proteins that function as antibodies. Cangene's proprietary manufacturing process allows it to produce high-quality hyperimmune products aimed at a wide variety of targets. The Company has been manufacturing its WinRho(R) SDF hyperimmune product for 25 years, which has established the manufacturing technology. As such, new Cangene hyperimmune products tend to enter the regulatory process at a more advanced stage, which may shorten the development time. Most recently, the Company's development efforts have been concentrated on developing products with infectious disease and bioterrorism targets.

About Cangene

Cangene is one of Canada's largest biotechnology companies. It was founded in 1984 and is headquartered in Winnipeg, Manitoba. Cangene carries out research and development in Mississauga, Ontario and in Winnipeg. It uses patented manufacturing processes to produce plasma-derived and recombinant therapeutic proteins. In addition to its four approved products, Cangene has several other products at various stages of development in its pipeline. The Company is also expanding its contract research and manufacturing business using its drug-manufacturing expertise and the resources of Chesapeake Biological Laboratories, Inc. (a wholly-owned subsidiary) located in Baltimore, Maryland. The Company has manufacturing facilities in Winnipeg and Baltimore. Cangene's website, www.cangene.com, includes product and investor information, including past news releases. Chesapeake's website is www.cblinc.com.

Forward-looking information

The reader should be aware that Cangene's businesses are subject to risks and uncertainties that cannot be predicted or quantified; consequently, actual results may differ materially from past results and those expressed or implied by any forward-looking statements. Factors that could cause or contribute to such risks or uncertainties include, but are not limited to: the regulatory environment including the difficulty of predicting regulatory outcomes; changes in the value of the Canadian dollar; the Company's reliance on a small number of customers including government organizations; the demand for new products and the impact of competitive products, service and pricing; cost of raw materials, especially the cost and antibody concentration in plasma; fluctuations in operating results; government policies or actions; progress and cost of clinical trials; reliance on key strategic relationships; costs and possible development delays resulting from use of legal, regulatory or legislative strategies by the Company's competitors; uncertainty related to intellectual property protection and potential cost associated with its defence; the Company's exposure to lawsuits and uncertainties related to estimates and judgments used in preparation of financial statements in accordance with GAAP and related standards and other matters beyond control of management. Risks and uncertainties are discussed more extensively in the MD&A section of the Company's most recent annual report and annual information form, which are available on the Company's website or on SEDAR at www.sedar.com. Scientific information that relates to unapproved products or unapproved uses of products is preliminary and investigative. No conclusions can or should be drawn regarding the safety or efficacy of such products. Only regulatory authorities can determine whether products are safe and effective for the uses being investigated. Healthcare professionals are directed to refer to approved labelling for products and not rely on information discussed in news releases.

The cautionary statements referred to above should be considered in connection with all written or oral statements, especially forward-looking statements, that are made by the Company or by persons acting on its behalf and in conjunction with its periodic filings with the Ontario Securities Commission, including those contained in the Company's news releases and most recently filed annual information form. Forward-looking statements can be identified by the use of words such as "expects", "plans", "will", "believes", "estimates", "intends", "may", "bodes", and other words of similar meaning. Should known or unknown risks or uncertainties materialize, or should management's assumptions prove inaccurate, actual results could vary materially from those anticipated. The Company undertakes no obligation to publicly make or update any forward-looking statements.

Cangene Corporation

CONTACT: about Cangene Corporation, please contact John McMillan, VicePresident Commercial Development at (204) 275-4310 or by email atjmcmillan@cangene.com.; To request a free copy of this organization'sannual report, please go to http://www.newswire.ca and click on Tools forInvestors.



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