VaxGen May Restate 2002, 2003 Results

VaxGen Inc., which shifted its focus to bioterrorism vaccines after failures in HIV research, said Monday that it might restate financial results for 2002 and 2003 as it reviewed its accounting for some contracts.

VaxGen said it was reviewing when it should account for revenue from contracts with the National Institute of Allergy and Infectious Diseases. The company last month hired PricewaterhouseCoopers as its auditor to replace KPMG.

An accounting change would increase revenue and decrease the company’s reported net loss applicable to common shares for the two years, VaxGen said.

The company’s shares have more than doubled this year as it seeks to supply the U.S. government with an anthrax vaccine. VaxGen last month submitted a plan to make 75 million doses of an experimental vaccine for a national stockpile.

Shares of Brisbane, Calif.-based VaxGen fell 56 cents to $15.80 on Nasdaq.

VaxGen said it was considering whether to account for revenue from the institute at the same time as costs related to the contracts. The revenue now is added after certain project goals, known as milestones, are reached.

The company in March said its 2003 net loss applicable to common shareholders narrowed to $28.7 million, or $1.52 a share, from $49.8 million, or $3.42 a share, in 2002.

VaxGen was founded in 1995 to develop an HIV vaccine. The company last year said its experimental vaccine failed to protect people from infection with HIV, the virus that causes AIDS, in two studies.

In January, VaxGen announced that then-President Don Francis and Phillip Berman, senior vice president for research and development, would leave the company to continue their work to find a HIV vaccine.

Francis, a co-founder of VaxGen, was featured in the book “And the Band Played On.” Actor Matthew Modine played Francis in the movie based on the book.