Emergent BioSolutions Inc. (EBS) shares are trading higher after the biopharmaceutical company said the U.S. government has issued a request that could lead to a contract for a large batch of its anthrax vaccine.

Emergent said it is in discussions with the government to provide an additional 44.75 million doses of its anthrax vaccine, BioThrax, over a five-year period for the Centers for Disease Control's Strategic National Stockpile.

Although the government's request for proposal is no guarantee of a contract, Emergent is seen as the likely winner, analysts say, as BioThrax is the only anthrax vaccine currently licensed by the U.S. Food and Drug Administration.

Emergent's shares soared on the news, reaching a high of $26.41 that was last seen in 2009. It is currently up 16% at $24.87.

It's the long-term commitment that is particularly important for the company's top-line, analysts say.

"Five-year visibility into sales is exceptional in any business," Wedbush Securities analyst Gregory Wade. He said investors are cheering that if the contract is awarded to Emergent, then the government will essentially be purchasing virtually "everything" the company can manufacture within its existing infrastructure.

Assuming it does receive the award, Wade said he estimates annual BioThrax revenues of about $280 million, yielding annual profits of about $84 million. WBB Securities analyst Steve Brozak said it is difficult to speculate the exact value of the contract without knowing more about shelf life of the doses and stability issues, but he also expects it to be worth more than $1 billion over the five-year period.

Emergent said it expects to finalize the contract with the government during third quarter.

The request also underlines the U.S. government's continued committment to investing in biodefense, which bodes well for Emergent, as well as for peer PharmAthene Inc. (PIP) and pharmaceutical company BioCryst Pharmaceuticals Inc. (BCRX), which has a contract with the government for flu treatment.

"This is a very good sign in terms of the government reassuring investors that it is serious about making purchases," said Brozak. "This is a very good sign for biodefense companies that they are going to get more contracts into the future."

Earlier this month, Emergent signed a modification to its current contract with the U.S., increasing the number of BioThrax doses delivered and shipped to the government to 17.9 million, up from 14.5 million.

-By Corrie Driebusch, Dow Jones Newswires; 212-416-2143; corrie.driebusch@dowjones.com;

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