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The Wall Street Journal has a front page article today about progress towards a Malaria Vaccine. (Subscription required.)

"Under two new funding strategies championed by Microsoft Corp. founder Bill Gates and Britain's finance minister, Gordon Brown, rich nations and their private-sector partners for the first time would jointly guarantee the provision of vaccines against the worst scourges afflicting the developing world.

They are stepping in where market mechanisms have failed. While older vaccines for diseases like mumps and measles are more widely and cheaply available, vaccines for malaria, tuberculosis and AIDS, the developing world's top killers, are so risky and costly to bring to market that little progress has been made in these areas. The malaria vaccine about to be tested has been under development for two decades -- and at one point it was nearly abandoned. The annual death toll for AIDS, TB and malaria totals at least six million."

By MARILYN CHASE
Staff Reporter of THE WALL STREET JOURNAL
April 26, 2005; Page A1

Next month, hundreds of African infants will get an experimental vaccine against malaria in a medical trial that could foster a multibillion-dollar collaboration of science, philanthropy and market savvy.

Under two new funding strategies championed by Microsoft Corp. founder Bill Gates and Britain's finance minister, Gordon Brown, rich nations and their private-sector partners for the first time would jointly guarantee the provision of vaccines against the worst scourges afflicting the developing world.

They are stepping in where market mechanisms have failed. While older vaccines for diseases like mumps and measles are more widely and cheaply available, vaccines for malaria, tuberculosis and AIDS, the developing world's top killers, are so risky and costly to bring to market that little progress has been made in these areas. The malaria vaccine about to be tested has been under development for two decades -- and at one point it was nearly abandoned. The annual death toll for AIDS, TB and malaria totals at least six million.

The new funding tools are aimed specifically at this market failure. In one approach, donor governments would guarantee that a company that produced a cutting-edge vaccine for poor countries would receive market-rate prices long enough to recoup development costs. This mechanism, proposed earlier this month, is called an advance-purchase contract.

The other strategy consists of rich countries, for the first time, floating government bonds geared specifically to supplying poor countries with available vaccines now and new vaccines later. Through a proposed International Finance Facility for Immunization, the billions of dollars expected to be raised would greatly expand the distribution of existing life-saving vaccines for diseases like polio and hepatitis, and ensure that newer vaccines reach those who need them.

Of course, the first battle -- coming up with vaccines for the worst diseases -- is still being fought. Meanwhile, there is concern among aid groups that the new funding proposals will divert resources from proven tools, such as mosquito nets.

Malaria is one of the scourges targeted by the Bill and Melinda Gates Foundation set up by Mr. Gates and his wife, Melinda. The mosquito-borne disease, long kept in check in affluent nations with drugs and pesticides, kills nearly two million people in Africa every year, and claims additional victims elsewhere. Mr. Gates has steered his $28.8 billion foundation toward fixing such global-health inequities.

The focus of his current push is the malaria vaccine being tested next month. The vaccine program almost died in a corporate restructuring in 1999. But a Gates-funded group gave GlaxoSmithKline PLC's GSK Biologicals unit in Belgium a $10 million grant to fund the study for toddlers, and is negotiating for further grants to help fund the coming study in infants.

Malaria is transmitted by mosquitoes infected with a parasite that, once injected into humans, passes through four life stages in the bloodstream and liver before bursting from red-blood cells to ignite fever, chills, weakness, anemia, brain damage and death.

Centuries of drugs from quinine bark through standard antibiotics to the now preferred artemisinin drugs have proved useful. But malaria recurs every wet season, causing 300 million to 500 million cases world-wide. Drug resistance mounts relentlessly, and recurrent supply shortages limit treatment programs.

Preventive vaccines have faced daunting hurdles. Malaria's four stages complicate vaccine design, says Gates Foundation scientist Regina Rabinovich: "The parasite is way too smart."

In 1987, Joe Cohen, leader of the malaria project at GSK, began focusing on a vaccine that would boost antibodies but also stimulate special white blood cells, including "killer cells" that take out the human cells infected by malaria parasites.

Researchers volunteered to be guinea pigs. GSK Vice President W. Ripley Ballou -- then working at Walter Reed Army Institute of Research near Washington, D.C. -- vaccinated himself with an early prototype. After becoming infected by lab mosquitoes, he got malaria with a fever of 104. "I've never been so sick in my life," he says. But one volunteer was protected from malaria, offering a shred of hope.

Dr. Cohen's team analyzed malaria's deadliest strain, Falciparum. He selected a protein from the form injected by mosquitoes. Then he fused genes from this protein with hepatitis B virus. This rallied broader immunity by stimulating production of both antibodies and killer cells. The team christened the vaccine "Mosquirix," which combined the word mosquito and part of Rixensart, the Belgian city where the GSK unit has its headquarters.

By 1996, the vaccine was protecting "a significant number of volunteers in the lab," Dr. Cohen says. "It was a breakthrough." In 1998, the vaccine moved into field tests in adults in Gambia. But in 1999, amid skepticism about markets, the malaria research was slated for elimination. Dr. Cohen learned of the restructuring and called his boss on a Sunday morning, seeking a last-minute reprieve. He proposed funding his vaccine with outside grants, an unusual move for a corporation. The unit's president, Jean Stephenne, backed the idea.

Several scientists and public-health experts sent a seven-page application to the Gates Foundation. In June 1999 of that year, the foundation gave an initial $50 million, later raised to $150 million, to launch the Malaria Vaccine Initiative in Seattle, which in turn gave $10 million to GSK.

That money funded clinics, training and salaries for the largest such malaria-vaccine study in Africa to date: a controlled clinical trial in more than 2,000 Mozambique toddlers aged 1 to 4 that started in April 2003.

In Manhica, Mozambique, mothers lined up with their toddlers to receive either the malaria vaccine or a "control" vaccine, such as one for hepatitis. The malaria vaccine group had 30% fewer first attacks, 58% fewer deadly cases.

Touring Mozambique in September 2003, Mr. and Mrs. Gates visited a village where nearly half the children die of malaria. "I visited with a baby suffering from cerebral malaria, one of the most severe forms of the disease, and I didn't know whether that baby was going to be alive the next morning," Mr. Gates said in an e-mail.

While the vaccine work moved forward, work on funding was gathering momentum. The traditional vehicle for lowering medicine costs to the developing world is tiered pricing: Consumers in wealthy nations pay higher prices, subsidizing discounts in poor nations. But malaria vaccines don't have sales prospects in the developed world.

Seeking solutions, Gates Foundation officers had brainstormed in June 2003 with British finance experts at the Wilton Park Conference, sponsored by the U.K. government. Mr. Brown and his team were proposing a $50 billion International Finance Facility for general African aid.

The Gates Foundation's senior economist, Rajiv Shah, seized on the IFF concept to suggest a special pilot IFF just for vaccines. He proposed an IFF for Immunization that would let countries go to the international bond market to obtain funds to speed up the purchase of existing vaccines and later of new vaccines. The Gates and Brown teams, with the Global Alliance for Vaccines and Immunization, jointly proposed the $4 billion as a war chest.

The idea drew more support after Glaxo published the results of the Mozambique test in the British medical journal Lancet last October. Mr. Brown endorsed the IFF for Immunization and advance-purchase contracts. He urged leaders of the Group of Eight industrialized nations to act on the proposal at their summit meeting in Gleneagles, Scotland, this coming July, and he pledged £1 billion (about $1.9 billion) from the U.K.

Mr. Brown visited GSK's Mozambique vaccine test site earlier this year, and conferred with the Gates Foundation and Glaxo Chief Executive J.P. Garnier about making an advance-purchase contract available if the infant studies prove successful.

Mr. Gates lobbied French President Jacques Chirac, German Chancellor Gerhard Schröder and other leaders in private meetings and at the World Economic Forum in Davos, Switzerland, in January. There he said $4 billion "would save five million lives for less than $1,000 a life."

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France, Germany, Italy, Sweden, Canada and others backed the IFF. The U.S. didn't, saying it clashed with Congress's budget cycles.

Messrs. Gates and Brown also were pushing the advance-purchase contracts for the malaria vaccine. The idea was developed by Harvard economist Michael Kremer and the Center for Global Development, a Washington think tank supported by Mr. Gates.

Such contracts would assure companies of a substantial return on their investment by creating a market of $3 billion or more for malaria vaccines. They would offer companies $15 to $25 for a three-shot regimen for the first 200 million people. Then the price would drop to $1 or $1.50 a person.

The funding tool is gaining support in Washington. In its 2005 report, President Bush's Council of Economic Advisers called advance-purchase contracts for malaria vaccine "particularly promising" because they reward competition.

Next month, GSK tests advance to the ultimate target group: 10-week-old infants. In Mozambique and Tanzania, 600 to 800 infants will get malaria vaccine with their routine shots. If Mosquirix protects them -- a delicate feat due to their immature immune systems -- tests will expand to more countries. If these succeed, GSK says Mosquirix could be available in five years.

Without the Gates money, "it is fair to say we would not be where we are today. It would be difficult...to sustain the cost," says Glaxo's Mr. Garnier. Commercializing the vaccine would top $1 billion. GSK's vaccine-unit chief, Mr. Stephenne, says, "We need these incentives."

Some aid groups are less bullish on the malaria-vaccine funds. Doctors Without Borders malaria expert Christa Hook says she fears they would divert resources from proven tools like drugs and bed nets. Richard Feachem, executive director of the Global Fund to Fight AIDS, Tuberculosis and Malaria, says the vaccine would produce at best 50%-60% efficacy and may be closer to 10 years away. "We need to do a lot more of what we know how to do," he said.

Write to Marilyn Chase at marilyn.chase@wsj.com

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