|
Swine Flu Scare Raking
in Billions For Big Pharma
For a handful of drug makers, including the Novartis AG vaccine
division in Cambridge, the global effort to combat the swine flu
is turning out to be good business, bringing them a $7 billion
windfall.
The race to produce the H1N1 vaccine, at the urging of the World
Health Organization and governments here and abroad, has strained
supply chains and forced manufacturers to untangle production
snags. That has led to supply shortages and delays in shipping
the medicine to clinics and other health care providers.
But the urgency also has taught the companies valuable lessons
about handling pandemics; helped them hone emergency response
programs; and fueled new research, acquisitions, and investments
in vaccines for viruses and infections ranging from hepatitis
to meningitis.
That will benefit them long after the H1N1 alert is over. The
global market for vaccines is projected to more than double from
$16 billion in 2007, the most recent year for which data are available,
to $35 billion in 2014, according to Cambridge consulting firm
Scientia Advisors.
“With a pandemic like this, the upside for us is clearly
significant,’’ said Andrin Oswald, chief executive of
Cambridge-based Novartis Vaccines and Diagnostics, a unit of the
Swiss pharmaceutical giant. “The quicker we can ramp up our
volume, the better it will be for people in the United States
and around the world.’’
Novartis and four other drug makers - Sanofi-aventis, GlaxoSmithKline,
CSL Limited, and MedImmune - heeded the call to action by health
officials when swine flu was identified last spring.
They quickly accelerated production of seasonal flu vaccine to
free up capacity to make H1N1 vaccine, revamping their distribution
systems and wrestling with low “yields’’ of inactivated
virus strains in their egg-based swine flu vaccine production
system. Shipments began last month and are expected to continue
into next year.
Novartis expects to generate $900 million in the US and $1.2
billion worldwide from swine flu vaccine orders. That represents
a small fraction of the $40 billion the company rings up annually
in global biopharmaceutical sales, but it’s a big revenue
boost for its vaccine division, which reported $1.7 billion in
sales for 2008.
All of the makers of swine flu vaccine for the US market are
producing injectable doses, except MedImmune, which is producing
a nasal spray. Together, the companies have received worldwide
orders totaling $7 billion, according to an estimate by Leerink
Swan, a Boston investment bank specializing in health care and
life sciences.
“Investors are looking at this as a one-time event,’’
said Jason M. Gerberry, associate analyst at Leerink Swann. “These
companies will report a revenue benefit in the fourth quarter
of this year and the first half of next year, when the product
is delivered. But each company’s also learning how to respond
and how to shift capacity in real time.’’
That could prove important as new pandemics arise in the future.
And many of the giant drug makers, as well as smaller ones, have
begun placing bets on new vaccines and vaccine technology.
GlaxoSmithKline, a British drug maker, has plowed more than $3.2
billion into research and acquisitions to ready the company for
flu pandemics. Last month three major American drug firms - Johnson
& Johnson, Merck & Co., and Abbott Laboratories - struck
partnerships with smaller companies specializing in vaccine technology.
And the $68 billion acquisition of Wyeth Pharmaceuticals, completed
last week, gave rival drug company Pfizer Inc. a foothold in the
vaccine business.
MedImmune, based in Gaithersburg, Md., was acquired two years
ago by Anglo-Swedish drug giant AstraZeneca. It has marketed a
nasal spray for seasonal flu, under the brand FluMist, since 2003,
putting it in a good position to transition to a H1N1 product.
“This is really the first pandemic in 40 years,’’
said Chris Ambrose, senior director of medical affairs for MedImmune.
“But as flu vaccine manufacturers, we’ve all been taking
steps to prepare for this. Being ready to respond really is part
of our business.’’
Even before the swine flu outbreak, several factors were driving
anticipated growth in the vaccine market, including the aging
of populations in the United States and other Western countries,
making them more susceptible to viruses and bacterial infections,
and a rising interest by developing countries in vaccinating people.
“When China comes out and says it’s going to have a
national vaccine program, that’s music to the ears of these
companies,’’ said Henry Glorikian, managing partner
of Scientia Advisors. China, however, has its own fledgling sector
of drug companies that are preparing vaccines for influenza and
other viruses.
In responding to swine flu, drug makers uncovered some deficiencies
and inefficiencies in their supply chains.
One of the biggest for Novartis was a shortage of chickens that
could produce the eggs in which vaccines are grown. Another was
the discovery that virus yields were lower for the H1N1 vaccine
than for seasonal flu vaccines - one dose of swine flu vaccine
for every two eggs, compared with two doses of seasonal flu vaccine
per egg - delaying shipments until later than initially hoped
for.
“The challenge we’ve faced is how quickly we can produce
a certain volume,’’ Novartis’s Oswald said. “That
has depended on how fast the virus can replicate in our egg-based
production system. Every flu virus has its own characteristics.
That’s just nature.’’
* A
full list of h1n1 vaccine ingredients, alerts and warnings.
Reference
Source: www.boston.com
October 22, 2009
|
