Acambis plc has agreed with Baxter Healthcare Corporation the terms under which both parties have agreed to terminate the Canton manufacturing agreement.
Baxter will pay Acambis $19m as an unconditional payment as compensation for termination of the Agreement. The first payment of $9m is payable immediately. The second and third payments of $5m each will be payable in January 2005 and January 2006 respectively. Under UK Generally Accepted Accounting Principles, taking into account the time value of the income receivable c. $18.5m will be recognised as other operating income in 2004. The balance of c. $0.5m will be recorded within interest receivable and similar income during 2004 and 2005.
Under the terms of the Agreement, signed in December 2000, Acambis was to manufacture components of bacterial vaccines at its Canton manufacturing facility. In 2003, Baxter halted certain bacterial vaccine projects and informed Acambis that it was no longer required to manufacture these components in Canton.
Gordon Cameron, chief executive officer of Acambis, commented: 'I am delighted that our strong relationship with Baxter has enabled us to reach a mutually agreeable settlement. We are now in a position to explore alternative uses for the capacity at Canton that was previously committed to Baxter. We continue to work closely with Baxter in key areas of our business, including the MVA project and sales of ACAM2000 and VIG around the world.'