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  • NewLink Genetics Corp. receives $1 M letter contract from DoD to advance a promising Ebolavirus countermeasure.
  • Wholly owned subsidiary BioProtection Systems Corp. leads infectious disease program since 2006.
  • NewLink Genetics Corp. investors are getting aware of the so far ‘hidden’ infectious disease program.
  • Continuous revenue stream likely for follow-up acquisition/replenishing contracts for infectious disease countermeasures.
  • Diversification strategy changes risk assessment of NewLink Genetics Corp. business model; alternative (backup) technologies/strategies are already lined up.

Newlink Genetics Corporation (NASDAQ:NLNK) is going beyond cancer and receives $1.0 million for Investigational New Drug (IND)-enabling studies for their Ebolavirus countermeasure. The United States Defense Threat Reduction Agency (DTRA) awarded a contract to NLNK's wholly owned subsidiary BioProtection Systems Corporation (BPS) to advance one of the most promising countermeasures currently available against hemorrhagic fevers caused by Ebolavirus. DTRA is the U.S. Department of Defense's official Combat Support Agency for countering weapons of mass destruction. Interestingly, DoD approached Dr. Link's company, well aware that they were working since a while on the most promising Ebolavirus countermeasure. The resulting letter contract will allow to speed up the last required steps before clinical studies can begin.

BPS is a spin-off company incorporated in 2005 and licensed the IP for the Ebolavirus vaccine in 2009 from the Canadian government. The inventor Dr. Heinz Feldmann (and coworkers), former Head of the Special Pathogens Program at Public Health Agency of Canada is one of the world most renowned scientist combating emerging viral zoonoses such as Ebola. In 2011 BPS became NLNK's wholly owned subsidiary and continues to focus on infectious diseases.

The current Ebolavirus outbreak in four West African countries (Nigeria, Sierra Leone, Liberia, Guinea), declared as the worst outbreak of the deadly disease in history with more than 1,050 victims out of more than 2,000 cases, 1251 laboratory confirmed (as current as 08-13-2014) according to the Centers for Disease Control and Prevention (CDC), demonstrates the urgent need of a safe and efficacious countermeasure. On August 6th CDC issued its highest alert activation (Level 1), which is reserved for the most serious public health emergencies. The World Health Organization (WHO)declared the outbreak as an international public health emergency. Based on the 50 to 60% case fatality rate in the current outbreak it is not surprising that Ebolavirus in addition to smallpox virus and Bacillus anthracis (anthrax) are considered as the top 3 bioterror threats and high risk pathogens in the biodefense arena. Especially for the deadly hemorrhagic fevers caused by members of the filovirus family (i.e., Ebolavirus, Marburg virus) no approved vaccine or countermeasure is currently available.

Due to world trade and the extensive flight network it isn't too unlikely that this outbreak can spread worldwide quickly (not as a pandemic, but rather as individual infections). However, since Ebolavirus is not airborne (unlike H1N1 swine flu or the common influenza virus causing annual epidemics) the infection/transmission could be stopped with appropriate outbreak control measures currently in place in most developed countries. Therefore, unlike the West Nile virus spreading since its introduction in 1999 throughout the whole North-American continent supported by a vector capable to transmit the virus, it is not likely that Ebolavirus would spread similarly.

NLNK's vaccine candidate is not only an impressive vaccine proven safe (PLoS Negl. Trop. Dis. 2012;6:e1567) and efficacious in more than hundred non-human primate studies (including immuno-compromised animals - PLoS Pathog 4(11): e1000225), but is also currently one of the few post-exposure treatments available to combat the disease (J Infect Dis. 2011; 204 Suppl 3:S1075-81). Considering the rapid onset and devastating symptoms of the disease in case of filovirus infections it is a miracle to save someone from a disease with average case fatality rates of 70 to 90% (basically the majority dies once infected with the virus).

Based on the 100% vaccine efficacy and 40 to 100% protective rates (depending on the filovirus strain for infection used) in non-human primate post-exposure experiments, this candidate was chosen amongst dozens alternative approaches after careful elaboration of the world's experts in filoviruses for treatment of a laboratory accident back in 2009 when a BSL-4 worker in Germany potentially was infected by a needle stick injury. The exposed person survived the potential infection and treatment (J Infect Dis. 2011; 204 Suppl. 3: S785-90). The experimental vaccine had not been used before in humans but was considered as the best shot (no punt intended) for this accidental exposure.

NLNK's countermeasure is based on a technology called reverse genetics, allowing to manipulate another virus (vesicular stomatitis virus: VSV) to mimic Ebolavirus by displaying important Ebolavirus proteins instead of its own on its surface. Key of this technology is the removal of the VSV surface glycoprotein which renders the recombinant VSV completely harmless. This is in opposite to a similar technology licensed by Profectus Biosciences Inc. from Wyeth Vaccines (now Pfizer, Inc.; PFE) in which the VSV proteins stay in place (requiring the introduction of additional mutations to reduce neurovirulence and neuroinvasion) and additional proteins from the target virus are added.

After injection of this live-attenuated recombinant virus (it still can amplify, but is weakened so that the immune system has sufficient time to respond) the immune system is reacting and generates/amplifies a response resulting in the protection of individuals against infection with the real Ebolavirus. Since this approach is a platform technology it can be easily adapted to other filoviruses (PLoS Negl Trop Dis. 2013 Dec 19;7(12):e2600) and as a matter of fact also to other disease pathogens (PLoS Med 2(6): e183 ) to give a broad range protection against several diseases.

The government of many countries will be very interested in stockpiling this countermeasure not only as a preventive (prophylactic) vaccine (given to people at risk BEFORE infection), but also as a therapeutic post exposure treatment (given to patients AFTER infection). Contracts to acquire vaccines/drugs against biodefense pathogens or other infectious disease agents are lucrative as other examples can clearly demonstrate (see table).

Table 1: Examples of U.S. contracts to stockpile biodefense countermeasures



Contract [$ M]



Raxi (65,000 doses)


Human Genome (now GlaxoSmithKline: GSK)






BioThrax (44,75 million doses)


Emergent BioSolution


(75 million doses)

(was cancelled due to vaccine stability issues)

VaxGen Inc


Arestvyr (ST-246)
(2 million doses)


Siga Technologies Inc.


IMVAMUNE (20 million doses)


Bavarian Nordic


IMVAMUNE (8 million doses)


Bavarian Nordic

Considering the limited shelf life of biologics and therefore the need to replenish stockpiled countermeasures a continuous revenue stream, in addition to the initial contract, is a lucrative motivation for NLNK/BPS to advance their promising Ebolavirus vaccine/drug candidate and to receive FDA approval. The awarded $1.0 M DTRA letter contract (additional funding is subject to final negotiations) will fund all studies/manufacturing required for an IND submission. The likelihood for a quick FDA approval is high (assuming that a safety Phase I clinical study will not have disastrous results), considering the lower scientific hurdle required for a post-exposure treatment of a deadly disease (basically the alternative to treatment is almost certain death).

But even without an FDA approval countermeasures can be used in an experimental stage in emergency situation (see above 2009 BSL-4 accident). MAPP Biopharmaceutical's experimental drug (the development was also supported by DTRA) ZMapp was given to volunteers and Caliber Biotherapeutics might be involved (also DoD sponsored) in large scale manufacturing of ZMapp, a mixture of three humanized monoclonal antibodies.

Considering a quick start of the Phase I safety (dose escalation) study the result from the 20 to 100 volunteers can be evaluated within the next 2 to 3 months (depending on enrollment rates). Considering that dozens of BSL-4 workers actively involved in Ebolavirus work and health care personnel frequently employed to Ebolavirus outbreaks are eager to receive this promising countermeasure, enrollment should go quick for the upcoming safety study. In addition to Phase I safety data and the already performed non-human primate safety and efficacy studies no additional data (or clinical trials, i.e., Phase 2 and 3) are required for an FDA approval, which can be expected as soon as Q1, 2015. At this time an initial contract to stockpile approximately 250,000 doses (but potentially also millions of doses) into the Strategic National Stockpile (SNS) is highly likely. Considering commercial prices of antiviral drugs of $108 to $7,364 even at the low end would give NLNK $27 M and in case of a 2 M dose order a whopping $216 M (or much higher depending on the purchase price). Since the production of clinical grade (cGMP) material is rather simple and very efficient (the recombinant virus is growing to high titers and only a small amount is needed as a vaccine) profit margins are potentially fantastic (>80%).

This is a major milestone in NLNK's/BPS's infectious disease program and complements their efforts in HyperAcuteTM immunotherapies for cancer [algenpantucel-L (pancreas), dorgenmeltucel-L (melanoma) and tergenpumatucel-L (lung)] and the IDO (indoleamine-(2,3)-dioxygenase) pathway inhibitor program.

So far NLNK's infectious disease program was not presented as the main focus of the company and considering NLNK's late stage clinical development of promising cancer immunotherapies compared to the PRE-clinical development of infectious disease countermeasures the latter will play probably only a minor role in the overall success story of the company. However, diversification can be a key to success (see Dendreon Corporation (NASDAQ:DNDN) with only a single product), and in case of failure of one technology, alternative strategies already lined up early can turn a potentially doomed business to a successful endeavor.

With the announcement of a $1.0 M contract current but also new investors will better understand NLNK's diversification strategy and therefore risk aversion. With NLNK's current portfolio, the soon (within 6 months) to be expected second interim data of their ongoing IMPRESS (Immunotherapy for Pancreatic Resectable cancer Survival Study) Phase 3 clinical trial, a stock price off more than 50% from the high from February 2014 ($53.48), and an obvious support in the $19/20 area, NLNK is a clear buy.

A 7 week streak catapulted NLNK from $21 to over $50 earlier this year in anticipation of the first interim look at their IMPRESS trial. Now with a lower hurdle in treatment efficacy and therefore a higher likelihood of meeting the parameters for an end of the Phase III clinical trial and FDA approval, I expect a similar run-up to at least the $40 area (but new highs are also possible) during the next 3 months in anticipation of the Phase III clinical data announcement. By January 2015 (before the announcement) NLNK should trade in a $45 to $55 range which would leave still significant upside (considering the US market size of pancreatic cancer - $1.2B by 2015 based on Transparency Market Research, in addition to potential markets in Europe and Japan and follow up products already tested in clinical trials: melanoma and lung cancer and the IDO inhibitors) in case of an end of the Phase III study based on positive interim data at the second look.

Accumulation of NLNK in the $22 to $25 area seems to be a promising approach to be part of an (so far) unbelievable success story. NLNK can easily become a break-through biotech company with the goal to combat cancer and deadly infectious diseases with a several $ billion market capitalization. Enjoy the ride!

Disclosure: The author is long NLNK. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

Source: NewLink Genetics Takes A Shot At Combating Deadly Ebolavirus Infections: Diversification Strategy?