1. VACCINE INDUSTRY : PRESENT
AND FUTURE
Naveen Kumar

2. Flow of Presentation
 Introduction
 Vaccine Industry: An Overview
 Growth Drivers
 Challenges and Issues
 SWOT
 Company watch
 Future Perspective
 Further Developments
 conclusion
2

3. 3

4.  Every year 3 million deaths are prevented and 750,000 children
are saved from disability by vaccines(WHO)
 Why do we need vaccine?
 Common communicable diseases
 Geographic variation in disease spread
 Every 1$ invested in childhood vaccine save 18$
 Increased life expectancy to economic growth
4

5. VACCINES
 “A vaccine is any preparation intended to
produce immunity to a disease by stimulating
the production of antibodies. Vaccines
include, for example, suspensions of killed or
attenuated microorganisms, or products or
derivatives of microorganisms.”- WHO.
5

6. Vaccines vs Pharmaceuticals
Vaccines Pharmaceuticals
Regulatory
Focus on prevention – not patients,  Focus on treatment – patient is
but healthy subjects generally sick
Key role for the government agencies  Key role for healthcare players
 Very low acceptance of side effects  Acceptance of side effects varies by
severity of disease
Manufacturing
 High manufacturing and supply chain  Medium manufacturing and supply
complexity chain complexity
(Cold Chain Management, complex (Easier to handle chemical synthesis
biological processes) in most cases)
Marketing/ Sales
 Small Massive sales force commitment
 Major sales through government Sales through physician as prescriber
 Very few generic products Increasing generic threat
(Due to manufacturing complexity)
6

7. A Typical Cold Chain
7

8. 8

9. Problems in supply chain
 Tight price competition
 Damage to vaccines during transportation -
Storage problems
 Due to less financial incentive from govt. to
manufacturers – insufficient doses
 Demand uncertainty
 Manufacturing interruptions - required to
maintain cGMP standards so high product
rejection rate - supply can be impacted
9

10. Vaccine MRP, in `, Price offered Discount in Percentage
2008 (A) to physicians, `(A-B) Margin of
in ` (B) profit for the
physician (A-
B)*100/ B
Pentaxim 2066 1446 620 42.9
Imovax Polio 365 280 85 30.4
Tripacel 1211 762 449 58.9
Okavax 1468 986 482 48.9
Avaxim 80 952 665 287 43.2
TetractHib 504 305 199 65.2
ActHib
10
426 251 175 69.7

11. 11

12. STAGES OF VACCINE DEVELOPMENT
Total time of development 12 - 15 years
(Total Investment US$ 500mn – 1bn)
12

13.  76 US-FDA approved vaccines
 There are now 145 pure vaccines and 11
combination vaccines in clinical development
 Five major players–GlaxoSmithKline, Merck,
Sanofi-Aventis, Pfizer and Novartis
 Vaccines approved by FDA in 2010 :
Provenge, Prevnar 13, and Menveo
13

14. Vaccine segments
Human
vaccines
Pediatrics
Adolescents Adults Elderly
14

15. Global vaccine sales($ billion)
30
25
20
15
28
26
24
10
18
5
0
2007 2008 2009 2010
15

16. Major markets
Country Sales, 2008 Market share
($ mn) 2008(%)
US 4741 42.7
Germany 1755 15.8
Japan 911 8.2
France 835 7.5
Italy 303 2.7
Spain 198 1.8
UK 176 1.6
16 Source : Business insights, 2008

17. Global vaccine leaders(2010)
Company Sales($ billion)
GSK 6.50
SA 5.14
Pfizer 3.7
Merck 3.5
Novartis 2.9
SP-MSD 1.2
17 Source : Global Vaccine Market 2010 , Krishan Maggon

18. Global vaccine leaders
Others GSK
SP-MSD 21% 23%
4%
Novartis
10% SA
17%
Merck
12% Pfizer
13%
18

19. Top vaccines
Brand name Company Sales($ billion) 2010
Prevnar(13) Pfizer 3.6
Fluarix GSK 1.85
Fluzone SAP 1.75
Gardasil Merck 1.35
IPOL SAP 1.33
19 Source : Global Vaccine Market 2010 , Krishan Maggon

20. Managing the product life cycle
Factor New Product Market Product Maturity
Launch Penetration
Number of One Multiple, High,
producers industrialized industrialized and
countries developing
country
Capacity Low High Potential surplus
Market Low High, High, all markets
industrialized
Cost High Medium Low
Prices High uniform Tiered and high Tiered and low
average average
20

21. Overview of major vaccine related acquisitions
Target Company Acquiring Investment Date
Company Made Announced
Wyeth Pfizer $68 bn Jan 2009
MedImmune AstraZenecea $15.6 bn April 2007
Chiron Novartis $5.1 bn Oct 2005
Crucell Johnson & Johnson $2.6 bn Sep 2009
ID Biomedical GSK $1.4 bn Sep 2005
Shantha Sanofi Aventis $781 mn July 2009
Biotechnics
Acambis Sanofi Aventis $549 mn July 2008
Intercell Novartis $363 mn July 2007
Corixa GSK $300 mn May 2005
PowderMed Pfizer $230 mn Oct 2006
Coley Pfizer $214 mn Nov 2007
21 Source: VacZine Analytics

22. 2010 2015(F)
Sales (millions) $67791 $64532
Research & $9338 $7212
Development
Net Income $17983 $17430
EPS $2.23 $3.00
Top product Lipitor ($10773) Prevnar($5624)
22 Source: Forbes

23. 23

24. The Indian Market for Vaccines
 Indian market : US$ 524 million
 Vaccine industry will continue to grow at a CAGR
in the range of 10-13% over the next 10 years to
reach a size of between US$1.4 billion and
US$1.8 billion by 2020
 India produces about 40-70% of the WHO
demand for DPT and BCG, and almost 90% of
the demand for measles
 The largest vaccine producer in India is the
Serum Institute of India, it is the world’s largest
24
producer of measles and DPT vaccines

25. The Indian Market for Vaccines
,0
Animal
vaccines, 107
Domestic, 238
Export, 179
Source: Biospectrum (June 2010)
25 Figures in US$ mn

26. Increased vaccine sales in 2009-10
26

27. Major players
MNCs Local manufacturers
• GSK • Serum institute of
• Sanofi Pasteur India
• Novartis • Shantha Biotechnics
• Wyeth • Bharat Biotech
• Merck • Panacea Biotech
• Bio-Med
27

28. Company watch : GSK
 Market share 28%
 10% of total sales
 24% growth vs 2009
Vaccine India launch
Rotarix 2008
Cervarix 2009
Infanrix Hexa 2009
Synflorix 2010
28

29. Vaccines currently under
development by Indian companies
Vaccine Company Status of
development
Rotavirus vaccine Bharat Biotech Phase 3
Rotavirus vaccine Shantha Biotechnics Phase 2
Cadi-05 Cadila Phase 3
Malaria vaccine Bharat Biotech Phase 1
H1N1 influenza Bharat Biotech, Phase 2/3
(Swine flu) vaccine Panacea Biotech, SII
Conjugated typhoid Bharat Biotech Phase 3
vaccine
29 Source : Biospectrum, April 2010

30. Trends in vaccine industry
Major players looking to develop
flu vaccines
Increase exports
Increase focus on adult
vaccines
Increase in conjugation
vaccines
Novel methods of
vaccine administration
Vaccines
30 Source: PwC

31. Vaccine Market Drivers
 Breakthroughs with new products to address unmet
medical needs
 ‰ Contingency planning for pandemic infections
 Growing income in the developing world markets
 Threat from bioterrorism
 Potential for therapeutic vaccines
 Continued interest and investment from major pharma
players
 Education and awareness about disease prevention
 Participation by government in terms if improving
PSUs and investment
31

32. Challenges for the Indian vaccine
market
 Failing realization for mass vaccination(Hepatitis B)
 Funding
 High maintenance
 Slow regulatory approval
 Dependence on government
32

33. 33

34. Strengths
 Prevent disease
 Vaccines are widely available and programs
have reduced cost as a barrier to vaccination
 Vaccines Will Not Face Significant Generic
Competition
34

35. Weaknesses
 Vaccine Research and Development is
Lengthy and Expensive
 Less awareness
 Vaccine Manufacturing : High cost
 High maintenance products
 Regulatory approvals
 Funding to new enterprises
35

36. Opportunities
 Vaccines for Diseases Currently Without a
Vaccine
 Improved Vaccines for Partially Vaccine-
Preventable Diseases
 Global recognition of the benefits of
immunization
 Combination vaccines – way ahead
36

37. Threats
 Only strong players so intense competition
 Domestic Indian companies depend on
government procurement to push volumes
 Gestation period is long
 Ageing of their product basket
 Vaccine Distribution Networks
 The Anti-Vaccine Movement
37

38. 38

39. 39

40. Future vaccines
Vaccine Estimated annual burden of At risk population
disease
Dengue 10,000-20,000 deaths 2.5 billion people are at
500,000 severe cases risk, with a strong trend
upwards
Malaria 1.1 to 2.7 million deaths, 2 billion people in endemic
300-500 million cases regions
children under 5
Tuberculosis 1.6 million deaths; 8 million Endemic regions including
cases Africa, Asia and S. America.
Individuals infected with
Multidrug resistant TB
HIV/AIDS Almost 3 million deaths; 38- High risk groups Continent
42 million cases of Africa
40

41. And more…
 Diabetes
 Cancer
 Smoking
 Obesity
 Asthma
 Allergy
 HTN
41

42. 42

43. Adjuvants Conjugate vaccines
• Conjugation of sugar molecules
• Substances that helps vaccine to
present on bacteria to a strong
produce a stronger immune
immunogenic carrier protein
response
• Can stimulate cell mediated long
• Faster response lasting memory
• Broad immunity
To increase and prolong the immune response to the vaccine antigen
Adjuvant and conjugate vaccines may help to increase vaccine efficacy in the
elderly population
43

44. DNA vaccine
Advantages
Technique Ease of
manipulation
• Injection of DNA
encoding the antigen Simple
manufacturin
• Involves transfection of g
DNA plasmid containing
antigen coded gene into More stable
target cells which
results in immune Targetting a
response specific
organ
44

45. Conclusion
 Vaccine industry has been proved to be one of the fastest growing
sectors of the past decade and is forecasted to do so in future also
 Driven by novel, high-price vaccines, the 7MM’s paediatric and
adolescent vaccines market will almost quadruple in size by 2016
 Due to ageing populations, the emergence of new technologies and
the increasing awareness for vaccine-preventable diseases, adults
and the elderly are coming into focus as an attractive target
population for future vaccine development
 Advancement in the molecular biology and vaccine delivery systems
will be the key for further development of this industry
45

46. 46