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Staying Alive 

An AIDS vaccine should be our government's highest priority. So why is one researcher forced to seek funding from the War on Terrorism?

Wednesday, Mar 27 2002
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At 7:30 a.m. last Wednesday, a day after a roundtable about HIV among Native Americans, and a few hours before a discussion of spirituality and HIV, Don Francis sat on a stage at last week's HIV/AIDS Update Conference at Civic Auditorium. He was sandwiched between an anti-retroviral specialist, a microbicide researcher, and an expert on less deadly types of STDs. Francis was one of only two vaccine specialists out of 150 scientists who spoke at last week's conference. He was allowed 20 minutes to talk, a few more for questions.

Two decades after the outbreak of the "gay cancer," the AIDS epidemic has evolved its own social ecology, complete with treatment and prevention specialists, funding bureaucrats, social workers, care advocates, and half-interested politicians. At the base of this food chain lie the vaccine proponents, forced by circumstance into life as scrappy bottom feeders. Only 2 percent of the world's AIDS spending goes to vaccines. There are few vaccine activists; AIDS sufferers and their families are far more interested in treatment. Large pharmaceutical companies are only marginally interested in AIDS vaccines, and until recently, the government budget for vaccine research was a pittance.

This untoward environment has shaped a strange champion in Don Francis. If the virus that causes AIDS is an odd, fungible, indefatigable creature, then its most storied opponent is of a similar breed. When the government turned down his request to fund a massive vaccine trial seven years ago, he tapped into the venture capital boom with a $20 million vaccine startup company. Since this trial will end next summer with most experts saying it likely won't achieve the kind of positive result that would lead to a commercial drug, Francis and his company, VaxGen, have mutated again.

Francis has convinced a group of Korean companies to invest $160 million to build him a pair of bio-tech drug factories, with the promise of getting a piece of the $11 billion President George W. Bush has allocated to fight bioterror. If this creative financing end-run succeeds, VaxGen may survive well past next summer, when results of nationwide testing of its oft-maligned AidsVax vaccine become public. His company may become a commodity drug manufacturer, perhaps using the profits to develop other AIDS vaccines.

"There are other products that if they look good to go with us, we will be looking at those aggressively," Francis says.

Don Francis' persuasive genius, his brilliance as an AIDS-funding sharpie, his ability to inspire thousands of vaccine-trial volunteers and volumes of scientific scorn are exactly the traits one might expect to prevail in the bizarre, financially neglected world of AIDS vaccines.

And that's too bad, because America ought to consider the quest for an AIDS vaccine the most important project in the world.


Don Francis, a Centers for Disease Control specialist who battled the AIDS epidemic when it first broke out in San Francisco's Castro district two decades ago, has spent the past 17 years dedicating his life to a simple notion: Vaccines have eliminated previous generations' plagues, and they should eliminate AIDS. In a simpler world that might have meant a career spent grant writing, leading well-funded research teams, mounting a global vaccination campaign. Instead, it's required the skills of a physician, oil-field wildcatter, penny-stock pitchman, and international diplomat.

In 1995, after helping the South San Francisco biotech giant Genentech develop a vaccine it called gp 120, the vaccine team led by Francis applied for funding from the National Institutes of Health to conduct effectiveness trials, the last step before a drug is approved by the Food and Drug Administration. The NIH declined, saying the vaccine, which consisted of a protein designed to mimic HIV's protective shell, only created immunity against laboratory-bred HIV. It was ineffective against "wild," real-world HIV.

Rather than abandon the project, Francis convinced Genentech to spin the division into a separate company that Francis would run. He attracted $20 million in venture capital, opened offices near the San Francisco International Airport, and convinced the government of Thailand to cooperate in trials for his company's only product, the gp 120 vaccine he dubbed AidsVax. Two years ago he launched nationwide Phase 3 effectiveness trials at sites throughout the U.S. Some 5,000 U.S. volunteers have taken the vaccine. A public stock offering raised $40 million more.

The investors backing VaxGen haven't bought into just any speculative venture; they've bet on a wildly speculative one. The Associated Press last week quoted Anthony Fauci, director of the National Institutes of Health's Institute of Allergy and Infectious Diseases, akin to America's AIDS czar, as saying he didn't expect to see a successful vaccine in less than 10 years, even though results from Francis' vaccine will be available next summer, and about 30 other experimental vaccines are now undergoing preliminary trials.

The scientific obstacles to establishing an HIV vaccine represent one of the most vexing puzzles in science. Much vaccine work that goes on hasn't progressed past the level of basic, curiosity-driven research. Developing a vaccine that is safe, while perfectly immunizing against all strains of HIV -- a virus famous for its endless mutations -- may be beyond the ability of current biological science. Most experts in infectious disease, in fact, believe Francis' VaxGen trial will fail.

The antibodies produced in Francis' volunteers reacted specifically to a virus cultured in a Genentech lab. Given HIV's chameleonlike talent for genetically refashioning itself, critics say the vaccine had little real-world meaning. And when these artificially provoked HIV antibodies were mixed in a test tube with real-world HIV, the antibodies had no effect at all.

It was scientific skepticism about gp 120 that turned Francis into an entrepreneur: AIDS czar Fauci decided seven years ago that government money shouldn't be used to fund Phase 3 trials. Volunteers around the U.S. are expected to finish the AidsVax trial next summer. Even if the cause of vaccine science gains -- in the form of insights into vaccine technology, experience in conducting AIDS-related vaccine trials, behavioral data about the high-AIDS-risk groups who participated in the VaxGen trial -- the VaxGen investors lose.

They would have, that is, if Francis hadn't a month ago assembled an odd joint venture with, among other investors, a Korean tobacco company. ("If I can help wean them from the tobacco business, I'm glad to," Francis says.)

Three Korean companies will put up $120 million to build a "bio-reactor" factory in Inchon, Korea, and a smaller factory in South San Francisco. VaxGen will provide its personnel and expertise to the venture, but no cash. In exchange, VaxGen will receive a 44 percent interest worth $58 million -- enough of a stake in the commodities manufacture business to make the VaxGen investors if not whole, then certainly happier.

Official statements about the deal touted the potential role of the two plants in manufacturing VaxGen's proprietary AidsVax vaccine. But if the current trials should fail, the new factories will live on as freelance bio-reactors, producing other inventors' drugs much in the way Asian sewing factories make skirts for Calvin Klein. In this case, their client might be the Fight Against Terrorism.

"It's too early to discuss where we would fit in. But we are talking to appropriate government offices, the Office of Homeland Security, and have had mutual discussions of their needs and ours," says Francis. "What we want to do is capitalize on our skills. We know the diseases, we have remarkable laboratory skills, so I think we have something to offer."

Francis hopes to attract some of President Bush's massive anti-bioterror budget to help cover the more than $200 million VaxGen has so far invested in AIDS vaccine research.

"There are other potential biodefense vaccines that we might be interested in getting into and are in active discussion with the government right now," Francis says, adding that his experience as a former Centers for Disease Control epidemiologist could be enlisted in the fight against terror. "I have worked on those sorts of diseases. I worked on Ebola. Our current CEO, Lance Gordon, worked on smallpox. We're part of that small club that worked on these crazy bugs, we're part of that small club that has great familiarity with these diseases."

VaxGen's financial burden further lightened in January, when the Centers for Disease Control gave $8 million toward a study connected with the VaxGen vaccine trial. While a relatively small amount in the realm of medical research funding, the grant went a long way toward enhancing Francis' reputation as a financial sharpie; last month the Chicago Tribune reported that one of the Centers for Disease Control officials who participated in the grant-making decision became a VaxGen vice president three months later.


Francis has followed this unusual path to drug financing in part because vaccine research has so far been an afterthought in the world of AIDS science. Only 2 percent of the $20 billion the world spends annually on AIDS goes to vaccines, though there exists widespread scientific enthusiasm about the potential of the 30 or so vaccine prototypes under development. This year's National Institutes of Health budget includes $422 million for AIDS vaccine research -- a 24 percent increase over the previous year and nearly triple the fiscal year 1998 funding level. Bill Gates' charitable foundation has pledged millions more for AIDS vaccine research. But the fact remains that the increased funding represents only twice the amount it cost just to develop the VaxGen vaccine. The few vaccine activists who exist are the AIDS-world equivalent of highly specialized policy wonks, in part because vaccines make a lousy rallying flag compared to AIDS treatment. Who, after all, believes him- or herself to urgently need a vaccine? While the potential popularity of a 100-percent effective AIDS vaccine is indisputable -- wouldn't you take an FDA-approved HIV vaccine? -- the real-world economics of vaccine research are more subtle. When a successful vaccine does arrive, it's likely to be less than perfect: 40 percent effective is a theoretical possibility often bandied about. In that form, an AIDS vaccine might be a harder sell

Pharmaceutical companies have pushed vaccine research beyond the back burner. VaxGen spun off from Genentech seven years ago; Merck is one of the few larger pharmaceutical companies doing important AIDS vaccine research. The bad economics of the vaccine business are simple: Vaccine development is hugely expensive and risky. AidsVax is 17 years and $200 million in the making, and it is widely expected to produce only limited protection at best. A perfect AIDS vaccine wouldn't fit the profile of a successful consumer product in the way Coca Cola or protease inhibitors do; by definition, vaccines don't draw return customers. According to a report last year by the consulting firm McKinsey & Company, vaccine research is so expensive that even the possibility of mass inoculations aren't sufficiently attractive to lure pharmaceutical giants to make the necessary investments in research.

So vaccine research faces a financial gauntlet, even though preventing AIDS through vaccines would be vastly cheaper than caring for the 14,000 who will contract HIV today. And tomorrow, and the next day, and for the foreseeable future.

In a world where 40 million people are infected with HIV, and 5 million more contract the virus every year, and where every year, 3 million of them die, it's nice to have a financial sharpie on our side.

About The Author

Matt Smith

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