Vaccines: Just in Time for Big Pharma

January 1st, 2010. By janem

Big Pharma breathed a big sigh of relief when it realized vaccines can give a lot more bang for the buck than many “blockbuster” drugs. For pharmaceutical companies like Wyeth (now owned by Pfizer), Glaxo, Sanofi-Aventis and Novartis AG, pandemic flu threats–H1N1 in particular–couldn’t have come at a better time.

For instance, Wyeth’s pediatric pneumococcal vaccine Prevnar makes over $3 billion in annual sales–that should help cover product liability claims for its diet drug Fen-phen. (To date, the drug giant has set aside $21 billion to cover claims.)

And Merck & Co, already making shingles and cervical cancer vaccines, recently got into the US market via a deal to distribute seasonal flu vaccine made by Australia’s CSL Ltd, just in time to pay $4.85 billion in its Vioxx claims.

“Vaccines, vaccines, wonderful business,” quipped Chris Viehbacher, CEO of Sanofi-Aventis, which anticipates earnings of $6 billion in vaccine revenues this year and double its sales by 2013. In the last quarter of 2009, its H1N1 vaccines sales reached $500 million.

Novartis expected to generate $700m in fourth-quarter sales alone from its H1N1 vaccine, but GlaxoSmithKline is the main player in vaccines, holding 22 percent of the global market, and is set to cash in with Brazil, China and India as their burgeoning economies spell bigger budgets for healthcare spending. Glaxo is betting big time on the vaccine business: it just purchased a vaccine operation in Quebec for $1.4 billion, which may tighten the purse strings after paying almost $1billion to resolve lawsuits over its antidepressant Paxil.

Other big spenders are Abbott Laboratories ($6.6 billion on Belgian flu vaccine maker Solvay) and Johnson & Johnson (it just bought 18 percent of Dutch vaccine firm Crucell). “More companies are investing in vaccines as a way of diversifying away from prescription drugs,” says Michael Boyd of the International Federation of Pharmaceutical Manufacturers & Associations. “New technologies, such as cell culture, are enabling them to produce more sophisticated vaccines.”

With nearly 1 billion doses of H1N1 vaccine ordered in 2009, analysts predict the global vaccine industry will reach $40 billion by 2012: Cha ching. Perhaps this means we won’t see so many “blockbuster” new drugs entering the market in the next few years. After all, product liability litigation has been expensive.

Tags: Big Pharma, flu vaccine, H1N1, H1N1 flu, H1N1 Vaccine, vaccine

This was posted on Friday, January 1st, 2010 at 7:39 pm and is filed under Drugs/Medical . Feel free to respond, or trackback. Read our comments policy.