Vaccines: Fire in the Cold Chain - Pharmaceutical Executive


Vaccines: Fire in the Cold Chain

Pharmaceutical Executive

In addition to the drivers already mentioned, we have also seen growth from successful lifecycle management strategies. The two largest-grossing products in the preventative vaccine industry, Gardasil and Prevnar, are perfect examples. Gardasil for instance, doubled its eligible recipient base after receiving approval for male anal cancer, genital warts, and pre-cancerous lesion indications. In January 2013, Pfizer's Prevnar similarly received a nod from the FDA for an age 50+ expansion, a decision that has led Wall Street analysts to project an increase in sales from $4 billion to $5 billion a year. Vaccines that currently lead market sales have and will continue to provide a steady source of growth, and manufacturers intend to leverage R&D, manufacturing, and marketing capacity and increase year-on-year investments on promotional spend, post-marketing surveillance studies, and indication expansions.

Industry growth has led to M&A activity: Many large-scale manufacturers have turned to vaccines to drive sustained growth and branded revenue. In 2010, the industry reported over 195 vaccine partnering deals, including Johnson & Johnson's acquisition of Crucell, a $2.3-billion deal which strategically introduced the big pharma conglomerate to the mid-size vaccine manufacturer's portfolio of pediatric, endemic, and travel vaccine assets.

Takeda’s New Divison Charts Course to Global Growth
Other notable deals include GSK's recent $5.25 billion initial cash purchase of Novartis's non-influenza vaccine assets, in return for the transfer of GSK's oncology franchise and the development of a distinct consumer healthcare business. This brings to GSK a portfolio of travel assets that includes a promising meningitis vaccine franchise. Sanofi Pasteur's acquisition of Acambis in 2008 augmented the second-largest vaccine manufacturer's flu and tailored multivalent combinations with West Nile and dengue fever travel vaccine assets. In 2007, AstraZeneca acquired MedImmune for $15.6 billion in a deal that through Synagis and FluMist, positioned the company as the sixth-largest vaccines manufacturer. Takeda (see sidebar) launched a new business unit dedicated to vaccines in early 2012, and Mitsubishi Tanabe acquired Canadian company Medicago, thereby getting access to Medicago's innovative technology for producing vaccine-like particles from tobacco plant leaves.

What's next in vaccines

The next generation in vaccines development will rely on platform strategies founded on genomics, reverse vaccinology, high throughput DNA sequencing, new plant and insect based expression and production systems, and new more potent vaccine adjuvants. These developments carry the potential to rapidly produce novel, optimal and cost-effective vaccine targets that carry high chances of success in clinical development programs. Promising new vaccine candidates such as meningococcal-B, GBS, methicillin-resistant Staphylococcus aureus, pneumococcal, and pathogenic E. coli are already in development. Not only do these new platforms improve the prospects for vaccines against major infectious diseases such as AIDS, tuberculosis, dengue, and malaria, they also provide a basis for therapeutic-based vaccine development against other new and emerging conditions, including allergies, autoimmune disorders, and cancer.

Business points to ponder

New markets and diseases, specialized target populations, and increasing needs for preventive vaccines all lead to new opportunity, but also impose new challenges. The key strategic questions manufacturers will need to address include:

How to price products whose commercial benefit will rest predominantly in emerging markets?

How to effectively capture niche populations within an established vaccine disease area?

Within the structure of public health requirements and recommendations, how can technology advances be effectively translated into commercial advantage?

The benefits that the vaccine market offers will accrue to those who are able to creatively adapt and build on past approaches while incorporating the advances of new science and a more supportive policy environment: vaccines are no longer a fringe business—it's the "must have" in any public health agenda.

Kevin Fitzpatrick is a Principal at IMS Consulting Group. He can be reached at
. Nitin Mohan is Engagement Manager at IMS Consulting. He can be reached at
. The authors wish to thank Amy Guan for her contributions.


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