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Flu urges vaccine rush

It's early in the flu season and the board of directors at vaccine and biopharma company Chiron has approved a merger agreement with Novartis

The threat of avian flu is fuelling an already growing interest in the vaccines market

It's early in the flu season and the board of directors at vaccine and biopharma company Chiron has approved a merger agreement with Novartis, worth $5.1bn.

With the deal agreed, Novartis immediately announced the integration of Chiron's biopharmaceuticals activities into its pharma division, creating a new pharma development team; a move that gives Novartis its first foothold in the global vaccines market.

What have we witnessed here?

For one reason or another, vaccines have been covered in the news a great deal in the last few years. Severe acute respiratory syndrome (SARS), the threat of bio-terrorism, debate over the combined MMR vaccine and the increasing prevalence of infections, such as HIV and TB, have all grabbed headlines.

Nevertheless, vaccines remain a small part of the overall drug market - less than 3 per cent globally.

The biggest obstacle vaccine makers have faced is a small risk:return ratio, since many products have traditionally been purchased in bulk by governments and other public health authorities, such as humanitarian agencies, which demand low prices.

Vaccine manufacturers also continue to face liability problems and low payments from health insurers.

Finally, compared to the blockbuster drug model, which has been the industry mainstay and typically relies on chronic administration, vaccines also present one obvious but significant difference: most patients only need to take them once.

Rising interest

Why the upsurge in interest from big pharma? The industry is suffering a well-known productivity gap, with fewer new products reaching the market. While there are challenges on the revenue side of the business, the process of developing vaccines is more predictable, cheaper and faster than for small-molecule drugs.

There has also been a shift in focus from childhood vaccines towards adult vaccines for diseases such as cancer.

The latter are presumed to be one of the key drivers for growth of the vaccine sector, with overall sales expected to more than double in the next five years to in excess of $20bn annually.

Then, of course, there is avian flu (H5N1). Unfortunately, the latest in an apparently endless series of global panics has a very real precedent, with recently revised estimates putting the death toll from the 1918 Spanish flu epidemic at anything up to 100 million individuals.

Even the much less severe 1968 Hong Kong outbreak still led to at least one million deaths. Many dire warnings about the potentially devastating effects of an H5N1 pandemic are now being issued from even conservative scientific and political authorities.

Spanish flu had a worldwide infection rate of 50 per cent and a mortality rate of 5 per cent. By contrast - although its infection rate is unknown - the current mortality rate of H5N1 in infected humans is running at 50 to 75 per cent.

If this virus was to start efficiently transmitting person-to-person, the resulting worldwide pandemic would see infrastructure in developed countries stretched to breaking point while, as things stand, medical help in underdeveloped countries would be almost non-existent.

Unsurprisingly, drug companies have been quick to respond (click here).

Good company

With the Chiron deal, Novartis joins the ranks of a few other big pharma companies that already have a presence in vaccines.

Merck, for instance, is heavily involved with a portfolio that includes HIV, hepatitis and MMR vaccines among others. Three novel vaccine candidates are in phase III trials, with Food and Drug Administration (FDA) approval expected next year for Rotateq for rotavirus and Zostavax for shingles.

The jewel however is a papillomavirus vaccine, Gardasil, for the prevention of cervical cancer. According to some estimates, it could be the largest selling vaccine ever, with peak sales of around $2bn following launch, which could be as early as mid-2006.

Phase III studies showing 100 per cent efficacy with no apparent side effects position it well against GlaxoSmithKline's (GSK) experimental HPV vaccine, Cervarix; the subject of a lengthy battle over patent rights only resolved in February of this year when a cross-licence and settlement arrangement was reached between the two companies.

For its part, GSK has a solid vaccine portfolio, which through subsidiaries and licensing deals, includes more than 20 pipeline candidates, according to Thomson Pharma.

It also has a suite of marketed products that contribute just under 6 per cent to topline revenues and include a range of hepatitis vaccines, such as Havrix (hepatitis A), Engerix-B (hepatitis B), Twinrix (combined hepatitis A and B vaccine), and Infanrix (diphtheria, tetanus and pertussis).

GSK also markets Priorix, an MMR vaccine, Typherix, a vaccine for protection against typhoid fever, Varilrix, a vaccine against varicella or chickenpox, and Mencevax, a range of vaccines to prevent meningitis. Vaccines are also strongly represented at sanofi-aventis, which has the most advanced H5N1 candidate, as indicated in the sidebox.

As it is, the company already has 55 per cent of the world's capacity of flu vaccine, and clinical trials with its H5N1 vaccine have now begun.

Out in the cold

Notably, the world's largest pharma firm, Pfizer, has little in its portfolio to indicate a strategic interest in vaccines, despite being instrumental in the development of a polio vaccine in the 1950s.

Should the company wish to expand into this area, then, like Novartis, it will almost certainly be achieved through acquisition.

The Author
Dr Peter Robins is editorial and content manager for drug information at Thomson Scientific. This article was written using data from the Thomson Pharma database (www.thomson-pharma.com)

2nd September 2008

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