IMS websites

• IMS Health Global Website
• Learning Solutions & Change Management
• All IMS Websites

MARKET INSIGHTS

• Overview
• World Markets
• Drugs and Compounds
• Companies
• Therapies and Diseases
• Regulatory
• Industry Issues

INDUSTRY SECTOR

• Overview
• Pharmaceutical
• Generics
• Biotechnology
• Consumer Health
• Financial
• Chemical
• Public Sector and Regulatory

ISSUES

• Overview
• Understanding Complex Markets
• Portfolio Development
• Health Economics and Outcomes Research
• Launch and Brand Management
• Consumer Health
• Sales Force Effectiveness

OFFERINGS

• Overview
• Chemical and Generics
• Companies and Markets
• Consumer Health
• Forecasting
• Drug Information
• Patients and Diseases
• Pricing and Reimbursement
• Sales Information

Vaccines are big business. The vaccines market is expected to double by 2012, from a current level of Euro9.7 billion, to more than Euro18 billion, according to sanofi pasteur, the vaccines division of sanofi-aventis. Putting this into context, global sales of another emerging, but nevertheless already well-established market, that of oncology, came to $25 billion in 2006, according to IMS.

IMS MIDAS Quantum data shows that the top 20 vaccine brands account for 77% of total vaccine sales, and there is a fast-growing vaccines pipeline, with 20 new brands having been recently filed or approved and another 31 in Phase III trials.

Top 10 vaccines for 12 months ending March 2007

*Note: Merck & Co and sanofi pasteur market a number of vaccines together through their Sanofi Pasteur MSD joint venture.
Source: IMS Knowledge Link

Big pharma upping their commitment to vaccines

The big hitters in the vaccine world, e.g. GlaxoSmithKline, sanofi pasteur and Merck & Co, are anticipating vaccines becoming one of their major drivers of growth going forward. As a result, they are upping their commitment to the area. GSK Bio, GSK's vaccines arm, accounted for 8.4% of GSK's pharmaceutical turnover in 2006, reporting sales up 23% to $3.4 billion. GSK Bio is set to become an increasingly important part of GSK's business and has been transformed from a tiny company with one product and $3 million in revenues, into a $2 billion behemoth with six vaccines in late-stage development - GSK's vaccines business has doubled in growth over the past five years and the company expects it to double again over the coming five years.

sanofi pasteur, together with its European joint venture with Merck & Co, Sanofi Pasteur MSD, is a leader in flu vaccines. In 2006, sanofi pasteur accounted for 8.9% of sanofi-aventis' sales, up 22.7% to $3.5 billion (Sanofi Pasteur MSD reported sales of $914 million, up 5.3%). sanofi pasteur is well-positioned for growth, as it has a leadership position in influenza, meningitis and boosters, and is also strong in polio, pertussis and Hib (Haemophilus influenzae type b), with at least two major product launches anticipated in these areas during 2007, notably Pentacel in the USA and Pentaxim in Mexico.

With regards to Merck & Co, the company expects the sales of its vaccines in 2007 to be in the range of $2.8-3.2 billion, up from a figure of $1.7 billion in 2006 (an increase of 73% on 2005). Merck in 2005/2006 launched three vaccines: Gardasil for cervical cancer/human papilloma virus, RotaTeq for childhood diarrhoea caused by rotavirus, and Zostavax for shingles.

Wyeth, the fourth of the 'big five' (Novartis is the fifth), has been the originator of the first billion dollar vaccine, the pneumococcal vaccine Prevnar: it had sales in 2006 of $1.9 billion and peak sales in 2009 of more than $3 billion have been predicted by analysts at Bear Stearns.

Anticipated vaccine sales as a percentage of overall pharma sales 2009-2012 for top five vaccine companies

Source: IMS Company Profiles/Merrill Lynch

Vaccine 'outsiders' jumping onto bandwagon

Apart from the established vaccine players among big pharma, other large companies have recently attempted to join the party. Novartis in 2005 bought Chiron. The transaction positioned Novartis among the top five global vaccine makers with special expertise in the growing area of flu vaccines - Novartis is now the second largest manufacturer of flu vaccines and has created a fourth division in its healthcare sector focused on vaccines and diagnostics.

In October 2006, Pfizer agreed to acquire UK-based vaccine company PowderMed, a leader in the development of DNA-based vaccines, its first foray into the area. Pfizer said that it was "strategically committed" to the vaccines business. The PowderMed acquisition was just the first step towards doing that. Pfizer plans to build its vaccines business through its internal capabilities and external sourcing. PowderMed added several vaccines to Pfizer's pipeline, including vaccines against influenza, HPV and hepatitis B.

Then in April 2007, AstraZeneca announced the acquisition of biological specialist company MedImmune. MedImmune will inject vaccines into AstraZeneca's empire for the first time - the US biotech collects royalties from both Merck and GSK on sales of vaccines for HPV (Gardasil and Cervarix respectively) and has a number of vaccines in its early-stage pipeline. Even established companies are increasing their focus on the area, with GSK in 2005 buying both Corixa (a developer of innovative adjuvants) and ID Biomedical, the latter with the aim of boosting its vaccines presence in the USA.

During an interview with IMS Company Profiles in April 2007, Wayne Pisano, President and CEO of sanofi pasteur, commented on the possibility of consolidation going forward: "I don't see that happening for the big five, but yes, it will happen to the smaller companies." In terms of future market share changes, however, Pisano said, "Merck will increase its market share because of the impact of the cervical cancer vaccine Gardasil. There won't be any great shift in market share for either GSK or sanofi pasteur - they will grow in proportion to the market."

Vaccines key element of R&D for large players

Several new vaccines, many with blockbuster potential, have been launched by the major players in recent years. GSK has Rotarix for gastroenteritis, launched in a number of countries since 2005; cervical cancer vaccine Cervarix, filed in Europe, Latin America, Asia and Australia in 2006, and in the USA in March 2007 (peak sales of up to $1.2 billion are anticipated); Globorix, a conjugated vaccine for immunization against diphtheria, pertussis, hepatitis B, Neisseria meningitidis serogroups A and C, tetanus and Hib was filed in Europe in March 2007; and a vaccine for H5N1 pandemic influenza was filed in January 2007. Cervarix is seen by many analysts as GSK's biggest near-term pipeline opportunity, and the company itself estimates the market opportunity for the new cervical cancer vaccines will be $3.5-7 billion by 2010.

Merck & Co and sanofi pasteur's cervical cancer vaccine, Gardasil, was launched in its first market, the USA, in June 2006 and has since been introduced in several EU markets and Canada. "Gardasil will make a major impact on the Sanofi Pasteur MSD joint venture during 2007," said Pisano during a meeting to announce sanofi-aventis' 2006 results in February 2007. Pisano said the following product launches would drive future growth - RotaTeq (rotavirus), Flu Micro-injection, ProQuad (measles/mumps/rubella/chickenpox), Zostavax (shingles) and Menactra for meningitis: Menactra, first launched in the US in March 2005, achieved sales of $330 million for 2006 and $246 million in the first half of 2007.

Analyst projections for several key new vaccines - 2010

Source: Credit Suisse/Cowen & Co/Bear Stearns

The need for vaccination is undeniable. A 2001 calculation by the US Centres for Disease Control and Prevention estimated that every dollar invested in vaccinations across nine childhood diseases saved nearly $6 in direct medical care and $18 in indirect costs. Vaccines at the end of the day save lives.

This article was written by Dr Nora McCarthy, Executive Editor of IMS Company Profiles. Covering more than 80 of the top pharmaceutical and biotechnology companies, the profiles offer authoritative insight into company strategy, finances, portfolio management, R&D and history and also contain top-line IMS sales data. For more information, please contact Stephanie Earle via e-mail, or call +44 203 075 5757.