ID Biomedical Corporation announced today that it has signed long term marketing, distribution and minimum purchase agreements with three of the largest influenza vaccine wholesalers in the United States: Henry Schein, Inc.; AmerisourceBergen Corporation's Specialty Group; and McKesson Corporation.
Under the terms of the agreements, each of the distributors has agreed to purchase a minimum number of doses of Fluviral vaccine from ID Biomedical beginning upon United States Food & Drug Administration (FDA) clearance. The purchases could begin as early as next year, and will end after the 2014/2015 flu season.
It is the expectation of the parties that ID Biomedical's Fluviral will be licensed in the U.S. by at least the 2007/08 influenza season, meaning the vaccine production and purchase transaction will cover a total of at least 8 influenza seasons. Based upon current estimates of the 2005 average retail price for influenza vaccine in the U.S., and assuming a modest 4% annual price increase from 2005 through the year 2014, the total value of purchases from ID Biomedical under the agreements is expected to be approximately U.S. $2.3 billion. If Fluviral is approved on an accelerated basis for the 2005/06 and 2006/07 seasons, then the total value of the contract related-revenue to ID Biomedical will increase to approximately U.S. $2.5 billion.
The total value of the contracts could be higher or lower than these estimated amounts depending on market prices for influenza vaccines in the U.S. over the next 10 years. In addition, the estimated total value of the agreements also assumes ID Biomedical does not increase production over its targeted capacity for this particular product over the life of the agreements. If ID Biomedical increases production of injectable influenza vaccine to be sold in the U.S., then each of the parties within the ID Biomedical distribution alliance will have the right, but not the obligation, to increase the minimum number of doses to be purchased.
These purchases are being made from ID Biomedical on a non-returnable basis, and are contingent upon FDA clearance of the product in accordance with industry standard practices for each season and overall licensure prior to the 2008/09 flu season. Other terms of the Fluviral marketing and distribution agreements transactions have not been disclosed.
The agreements do not cover ID Biomedical's intranasal flu vaccine, FluINsure, as the Company has maintained all rights to this product, which is currently in development.