Cambridge-based biotech Acambis (ACM) saw its shares leap 37 per cent to 332.5p in early trading after its US subsidiary won a $428m (£355m) order to supply the US government with 155 million doses of smallpox vaccine. William Davidson reports.

The British biotech business won the contract, its second with the US authorities, ahead of pharma giants Merck and GlaxoSmithKline. According to US press reports, the Washington administration is looking to stockpile 500 million doses of the vaccine.

Smallpox was officially eradicated in the 1970s. But the spate of anthrax incidents in the wake of the 11 September terrorist attacks has awakened fears that the virus might be used.

The joint bid with Baxter, a US company with a 12.6 per cent stake in Acambis (ACM), will see Baxter produce the vaccine in bulk at its plant in Europe. Acambis, meanwhile, will refine and process the material at its plant in Massachusetts.

Acambis won its first contract with the US government in September 2000 to supply vaccine for 20 years, with 54 million doses scheduled for delivery in 2002. The second contract will mean that Acambis will supply a total of 209 million doses, nearly enough to fulfil the US government's plan to be equipped to vaccinate every single American.

Clinical trials of the vaccine are slated to start in early 2002. FDA approval is pencilled in for mid-2003.