The government has created a new, genetically engineered anthrax vaccine that promises to cut in half the six shots now needed for protection, and chose a pair of biotechnology companies to begin testing it.

The contracts, awarded Thursday for $22.5 million, will allow California-based VaxGen Inc. and Britain's Avecia to test the experimental vaccine on people to see if it is safe and, if so, to see if it provides protection against the deadly bacteria.

Federal authorities hope that together, the two companies will pave the way toward Food and Drug Administration approval for the vaccine. Eventually, the government wants 25 million doses manufactured and added to the National Pharmaceutical Stockpile.

VaxGen said it plans to begin testing for safety by mid-2003 and finish by the end of next year.

The current anthrax vaccine works well, experts say, but it requires six shots over 18 months plus an annual booster and it causes certain side effects. Last spring, a scientific advisory panel endorsed the existing shots, but recommended development of the next generation of vaccine, one that would require fewer shots and cause fewer side effects.

The search for a replacement took on new urgency after last fall's anthrax attacks, discovered a year ago Friday when health officials announced that a Florida man had mysteriously contracted the disease. Later, as more cases emerged, investigators learned that the spores were being spread through the mail.

"There is an urgent need to devise more effective measures to protect U.S. citizens from the harmful effects of anthrax spores used as instruments of terror," Health and Human Services Secretary Tommy Thompson said in a statement Thursday announcing his agency's grants.

Federal scientists working at the Army's lab at Ft. Detrick, Md., have already developed the science behind the promising new vaccine. There are three proteins that make anthrax deadly, and all must work in concert to cause infection. The experimental vaccine engineers one of them, called protective antigen, which stimulates the body's immune system so that it can recognize and fight anthrax should the person actually be infected later.

The private companies must now try and translate this technology into a practical vaccine. They must create samples for testing, then test the vaccine on a few people to see if it is safe. If these so-called Phase I trials work, the vaccine would be tested on larger groups of people to ensure it protects against infection -- steps vital for FDA to ultimately approve its sale.

On Thursday's news, VaxGen stock rose 13 percent, or $1.17 per share, to close at $10.17 in trading on the Nasdaq Stock Market. Avecia is privately held.

The existing vaccine, manufactured by BioPort of Lansing, Mich., also uses the protective antigen, but the protein was not genetically modified using today's modern techniques, said Robert Myers, BioPort's executive vice president. He added that his company's vaccine may also be effective when delivered in two or three doses, testing that is now under way.

The current vaccine is not now offered to civilians who have not been exposed to anthrax. It is, however, routinely used by the Pentagon.

All existing vaccine was under control of the Defense Department until this summer, when HHS and the Pentagon agreed to split the stockpile and each take half.

It's not clear if the vaccine could protect when administered after exposure to anthrax. Still, federal health workers offered it to congressional staffers and postal workers who were exposed during last fall's attacks in hopes it might offer greater protection than antibiotics alone. Only about 100 people opted to receive it, though.

That's partly because the government gave no recommendation about the vaccine, leaving it up to each person to decide whether to get the shots. That caused a lot of confusion, something officials said Thursday they are trying to avoid as they plan to eventually offer a vaccine against another potential bioterror agent -- smallpox.

For smallpox, debate centers on how many Americans should be offered the shots -- which carry rare but serious risks, including death. The plan now on the table would eventually offer the shots to everyone.

An important, related issue is whether to specifically recommend that people get the shots, or just offer them and let people decide on their own, said Dr. Anthony Fauci, the National Institutes of Health's infectious disease director.

After the anthrax attacks, officials simply left it up to each person to decide.

"We were criticized right, left and center for putting it out in this way," said Dr. D.A. Henderson, a top HHS bioterrorism adviser. "We didn't know really what to say."