December 1, 2009 (Vol. 29, No. 21)
Many Factors, Chief Among Them a Potential Pandemic, Are Fueling Vaccine Resurgence
The potential H1N1 pandemic has drawn renewed interest in vaccines. Over the last 100-plus years, vaccines have been one of the most important agents for controlling infectious disease. From a commercial standpoint, however, vaccines have been a low growth business due to safety risks, low prices, and ancient technology that is prone to frequent failure. The production difficulties have become more apparent with the current pandemic flu emergency and widespread shortages of H1N1 vaccine.
It is widely believed that vaccines are one of the most effective public health interventions. The Bill and Melinda Gates Foundation has been funding vaccine research since 1998 and has committed $2 billion through 2009. The foundation focuses on malaria, tuberculosis (TB), and HIV and has a goal of preventing four million deaths per year. More than 200 million children have been immunized since the foundation’s inception.
Several bullish vaccine forecasts have been published recently. According to a report from Kalorama in June, global sales of $9.9 billion were recorded in 2008 for pediatric vaccines with growth forecasted at 16.3% annually through 2013, when the market is expected to reach $21.1 billion. Among the new pediatric products that will drive sales growth are hepatitis, MMR, combination, and pneumococcal vaccines.
The worldwide market for adult vaccines was $9.2 billion in 2008, it is growing at 14% and is anticipated to reach $17.8 billion in 2013. New product growth is expected to come from HPV, influenza, pneumococcal, and hepatitis vaccines. While Kalorama believes in the growth model it has lingering concerns about product safety, supply shortages, and consumers’ reluctance to immunize.
Seasonal flu sales for 2008/2009 are expected to be in the $2.8 billion range, growing to around $5 billion by 2018/2019. According to VisionGain, the period of 2008–2013 will be one of the fastest growing times for the pharmaceutical market.
Scienta Advisors forecasts 12% annual growth from 2008 through 2014, with growth of 8% in the viral vaccine sector and 10% growth in the pediatric bacterial vaccine sector. Scienta cites new trends in the market such as fewer competitors and product innovation that translates to higher volume and margins for leaders.
GlaxoSmithKline (GSK), Novartis, and AstraZeneca have all recently made major investments in vaccine products and technology. The Wall Street Journal reported that GSK has invested more than $3.2 billion in R&D, acquisitions, and manufacturing. GSK is also the leading developer of adjuvants. The company markets over 25 vaccines worldwide and has a broad pipeline that contains over 20 vaccines for pediatric and adult diseases.
AstraZeneca bought vaccine innovator MedImmune two years ago and is now selling FluMist® nasal spray products for seasonal flu A+B. MedImmune also markets a respiratory syncytial virus (RSV) vaccine. In addition, AstraZeneca has a number of collaborations with smaller companies.
Novartis has a contract to supply 90 million doses of H1N1 vaccine to the U.S. government. It recently switched from multidose to single-dose vials due to U.S. consumer concern about the use of trace amounts of thimerosal. Novartis is aggressively moving to cell-based manufacturing technology for future vaccines and is forecasting over $500 million in sales for the fourth quarter.
Sanofi-aventis expects H1N1 sales of about $500 million in the fourth quarter and believes that its product can be effectively delivered in just one dose.
Vaccines currently on the U.S. market primarily use aluminum salts as adjuvants, but some of the newer vaccines marketed outside of the U.S. such as GSK’s H1N1 vaccine use AS03, an oil-in-water emulsion and vitamin E combination. GSK’s Cervarix cervical cancer vaccine for HPV uses the company’s AS04 adjuvant, which consists of an aluminum salt and monophosphoryl lipid A.
MF59, the adjuvant in Novartis’ H1N1 vaccine, is also an oil-in-water emulsion; it can reportedly elicit a Th2 antibody response with a lower dose. Pfizer and Idera Pharmaceuticals have toll receptors under development for use as adjuvants. Antigenics’ QS-21 adjuvant is now in multiple clinical trials, including four Phase III trials.
Last year, Datamonitor published a report that reviews adjuvant technology for both prophylactic and therapeutic vaccines. Datamonitor sees a lower barrier for approval for therapeutic applications such as cancer and thinks that AS04’s performance in GSK’s product will have a crucial impact on prospects for future combination immunostimulatory adjuvants.
Crucell focuses on vaccines and proteins utilizing its PER.C6 cell line and its AdVac vector technology, which reportedly has the ability to mediate a strong T-cell immune response. Vaccines under development include yellow fever, flu, TB, malaria, Ebola, Marburg, and HIV. The firm’s strategic partners include Sanofi Pasteur, the vaccines division of sanofi-aventis, GSK, Novartis, and Johnson & Johnson, which recently purchased 18% of the company.
CSL has a broad commercial vaccine product line including an H1N1 vaccine and a Gardasil partnership with Merck. New flu vaccine programs are under way with Merck and Wyeth, now part of Pfizer. The company has also been working on an adjuvant called Iscomatrix, which consists of saponin, cholesterol, and phospholipids, and is currently in Phase II for flu.
Inovio Biomedical is focused on preventive and therapeutic DNA vaccines that utilize its SynCon construct technology and electroporation delivery. Its pandemic flu program is at the preclinical stage, and an HIV Pennvax-B program is in Phase I.
Ligocyte is focused on VLP (virus-like particle) technology, which is composed of multiple copies of a protein antigen that mimic the native virus. Norovirus is the initial target; Phase I trials are under way for the vaccine, which is formulated with the GSK’s MPL adjuvant.
Novavax is developing recombinant vaccines for infectious diseases, including H1N1 using VLP technology. R&D programs include H5N1, RSV, varicella zoster virus, and HIV. The company says that its manufacturing process will be higher yielding and less complex than current egg-based manufacturing.
Profectus Biosciences is a VC-funded firm that uses prime boost technology, which delivers plasmid DNA followed by a recombinant vesicular stomatitis virus vector. Viral disease targets include HCV, HPV, herpes simplex virus 2, and HIV.
Protein Sciences offers a baculovirus expression vector system for production of vaccines and proteins. Its FluBlok seasonal influenza vaccine completed Phase III studies and is currently under review at the FDA.
Vical develops vaccine and immunotherapy products based on its DNA delivery technology and a Vaxfectin adjuvant that is currently in a Phase I trial for H5N1. A CMV Phase II trial is being conducted for an immunotherapeutic vaccine.
Heavy R&D investment in vaccine technology over the past 10 years by governments, nonprofits, and commercial organizations has resulted in novel formulations, better delivery systems, and a variety of products to control infectious disease. Advances in cell culture and bioreactors combined with recombinant technology such as DNA and VPL vaccines will make manufacturing more cost effective and speed up the introduction of more new products. As vaccine products proliferate, and technologies gain clinical and regulatory acceptance, smaller innovative biotech companies will undoubtedly advance in the market.
Rod Raynovich ([email protected]) is a principal at Raygent Associates. Web: www.raygent.com.