This is free marketing research on the vaccines industry and can include information on the background, market structure, definitions, competitors, trends and developments of vaccines and is related to other topics such as drugs, treatment, prevention, health and medicine.

Table of Contents

Background

Over the last decade several trends have come together to revitalize the vaccine market. New vaccines have replaced old vaccines and are aimed at new disease and therapeutic segments. This has led to increase in pricing and vaccine manufacturers are leveraging new developments to make more on-schedule vaccines. Governments are issuing long-term purchasing contracts for vaccines. Public and non-profit support is creating new opportunities in underdeveloped countries. The Bill and Melinda Gates foundation has given away over $ 1.5 billion to form and develop GAVI (see industry definitions).

Market Structure

Vaccines can be classified depending on the use as prophylactic and therapeutic vaccines, depending on patient segment as Pediatric and Adult vaccines, depending on special needs like Travel vaccines and Seasonal vaccines for diseases like influenza, Animal vaccines for use in animals etc.

Pediatric vaccine categories include:

• DTaP & DTP Vaccines
• Hep Vaccines
• HiB Vaccines
• MMR Vaccines
• Combination Vaccines
• Pneumococcal Vaccines
• Polio Vaccines
• Varicella Vaccines
• Other Pediatric Vaccines

Adult vaccine categories include:

• Influenza Vaccines
• Hepatitis Vaccines
• Pneumococcal Vaccines
• Travel, DT and other Adult Vaccines

Competition within the vaccine sector is minimal, with key players only occasionally marketing directly competing products. As competition is likely to increase vaccine market will begin to resemble the model for conventional pharmaceutical products, requiring fast market entry in order to minimize lost revenue and avoid the threat of competition. Companies will need to increase manufacturing capacity in order to compete effectively within this market. The Center for Biologics Evaluation and Research (CBER) division of FDA regulates vaccine products. Vaccines, as with all products regulated by FDA, undergo a rigorous review of laboratory and clinical data to ensure the safety, efficacy, purity and potency of these products. Vaccines approved for marketing may also be required to undergo additional studies to further evaluate the vaccine and the vaccine's safety, effectiveness, or possible side effects. In Europe, the regulatory body is the European Medicines Agency – EMEA.

Industry Definitions

• Vaccine: A product of weakened or killed microorganism (bacterium or virus) given for the prevention or treatment of infectious diseases.
• Biological product: Substance produced by a living organism, such as blood, toxin or antitoxin, or vaccine.
• Stockpile: A stockpile is a special vaccine reserve to be used in emergencies (i.e. supply disruptions or disease outbreaks). As older vaccines approach their expiration date they are replaced with fresh vaccines and are rotated into the market for use in campaigns and routine immunization.
• GAVI: The Global Alliance for Vaccines and Immunization (GAVI) is a public-private partnership focused on increasing access to vaccines among children in the poorest countries. Partners include national governments, UNICEF, WHO, The World Bank, the Bill & Melinda Gates Foundation, the vaccine industry, public health institutions, and NGOs.

• Combination vaccines: vaccines which protect children against several diseases in a single shot such as the pentavalent vaccine which includes DTP, hepatitis B and Hib vaccines.
• Therapeutic vaccines: Therapeutic vaccines are products that treat existing diseases or conditions. The primary technology involves stimulates natural mechanisms of the immune system to overpower the infection or disease.
• Prophylactic vaccines: prophylactic vaccines prevent or ameliorate the effects of a future infection by any natural or "wild" pathogen.

Market Metrics

Vaccine market represents significant growth opportunity. World vaccine sales are expected to grow to $10 billion in 2007 and reach up to $23.8 billion by 2012. This growth is mainly propelled by new product development. Pediatric vaccines dominated but adult vaccines will see more growth due to increased uptake of influenza and hepatitis vaccines. Adult vaccines are expected to rise from $3.7 billion (their total worth in 2005) to $7.5 billion in 2012. It is projected that the combined global adult and pediatric vaccine markets will total $15 billion by 2012. The fastest growing segment in the adult vaccines area is influenza vaccines followed by Hepatitis vaccines, with a projected growth rate of 8-9 percent. Flu vaccines are forecasted to grow by 13.2 percent, will top $4 billion by 2012. The leading flu-vaccine manufacturers include Sanofi and Novartis. Hepatitis vaccines are projected to reach $1.5 billion by 2012. The top-selling hepatitis B vaccine currently is GSK's Engerix-B.

The prophylactic vaccine market is $7 billion, expected to grow at the rate of 9-11% annually. In area of therapeutic vaccines, cancer vaccines will also become a major player in the vaccine market, rising from its current level of $135 million to more than $8 billion by 2012.

Cancer Vaccines by type of cancer, company and brand name:

Worldwide vaccine sales are dominated by five major pharmaceutical companies that generate around 85% of sales. Their main market is pediatric vaccine which represents around 70% of market. These companies have large scale sales and marketing operations.

In 2004, global vaccine market sales were $8.5 billion. In the infectious disease sector, the vaccine market is fastest growing with growth of almost 26%. It is expected that influenza, HIV and cancer will be the biggest growth areas in the vaccine market.

Industry Players

Industry consolidation and mergers have improved prospects of vaccine market. Mergers have narrowed down about 25 vaccine makers to five major manufacturers: GlaxoSmithKline (GSK), Merck, Sanofi Pasteur, Chiron, and Wyeth.

• GlaxoSmithKline plc, together with its subsidiaries, engages in the creation, discovery, development, manufacture, and marketing of pharmaceutical and consumer health-related products. It operates in two segments, Pharmaceuticals and Consumer Healthcare. The Pharmaceuticals segment manufactures prescription drugs and vaccines that are used in various therapeutic areas.

• Merck & Co., Inc. engages in the discovery, development, manufacture, and marketing of various products for human and animal health. The company offers Varivax to prevent chickenpox; M-M-R II, for the treatment of measles, mumps, and rubella; ProQuad, a pediatric combination vaccine against measles, mumps, rubella, and varicella; Gardasil for the prevention of cervical cancer and genital warts; Pneumovax for the prevention of pneumococcal diseases; RotaTeq for the protection against rotavirus gastroenteritis in infants and children; and Zostavax, a vaccine for the prevention of shingles.

• Sanofi-Aventis engages in the research, development, manufacture, and marketing of healthcare products worldwide. The company has two business activities, pharmaceuticals and human vaccines. The company's human vaccines activity offers pediatric combination vaccines that provide protection against pertussis, diphtheria, tetanus, and haemophilus influenzae type b infections. It also provides poliomyelitis vaccines; oral polio formulations; influenza vaccines; adult and adolescent booster vaccines that protect against pertussis, tetanus, diphtheria, and polio; and meningitis vaccines. In addition, Sanofi-Aventis' human vaccines include travel, endemic and measles, and mumps and rubella vaccines for protection against hepatitis A, typhoid, rabies, yellow fever, Japanese encephalitis, cholera, MMR, and anti-venoms.

• Wyeth Pharmaceuticals, makes pharmaceutical drugs and vaccines, as well as biotechnology products Wyeth's pneumoccocal conjugate vaccine, Prevnar, reached sales of $700 million in the United States within 15 months of launch, and tallied sales of almost $1.5 billion worldwide in 2005 (see "Blockbuster Potential"). Prevnar was the first vaccine to rank among the top-10 new product launches for a major pharmaceutical company, and it quickly established itself among the top-three products in Wyeth's portfolio.

• Chiron Corporation was a multinational biotechnology firm based in Emeryville, California that was acquired by Novartis International AG on April 20, 2006. Chiron's business and research was in three main areas: biopharmaceuticals, vaccines and blood testing. Chiron's vaccines and blood testing units have been combined to form Novartis Vaccines and Diagnostics, while Chiron BioPharmaceuticals will be integrated into Novartis Pharmaceuticals. Novartis AG engages in the research, development, manufacture, and sale of health care products to physicians, pharmacists, hospitals, insurance groups, and managed care organizations in the United States and Europe. Its Vaccines and Diagnostics division develops influenza vaccines, such as meningococcal, pediatric, and travel vaccines; and blood-screening tools for blood testing and diagnostics of molecules.

Vaccine industry market capitalization

Recent Trends and Developments

A number of new vaccines with major potential for controlling infectious diseases have just been licensed or are at advanced stages of development. Among the illnesses targeted are rotavirus diarrhea, pneumococcal disease, and cervical cancer (as caused by human papillomavirus), which together kill more than a million people each year. Also lot of research efforts and money are put into development of DNA vaccines, cancer vaccine, cardiovascular vaccine and HIV vaccine. New delivery systems like needle free vaccine and other routes of delivery are under development. MedImmune launched a nasally administered vaccine FluMist in 2003, which is a real innovation.

Vaccines for bacterial meningitis, whooping cough and human papillomavirus are being studied among teens, who could account for 15 percent of the total market. Following the emergence of new viral diseases, (SARS, Avian Flu and West Nile Virus) in recent years, several companies have begun research into developing antiviral treatments and vaccines to combat these viruses.

The new wave of vaccine products represents enormous profit potential for companies and investors, as well as the opportunity to benefit millions of people.

Raising public awareness crucial to vaccine success

After years of stagnation in the childhood and adolescent vaccines sector, the launch of novel, high-price vaccines has sparked growth and the market is set to nearly quadruple in size to $16 billion by 2016. However, with healthcare providers on tight budgets for vaccinations, vaccine manufacturers need to focus on real medical needs and raising public awareness to ensure commercial success.

Childhood and adolescent vaccination across the western world has long centered around established and cheap vaccines to prevent diseases such as diphtheria, tetanus, pertussis, mumps, measles and rubella. However, beginning with the launch of Wyeth's pneumococcal vaccine Prevnar in 2000, the sector has experienced a rapid introduction of novel, high-price vaccines for additional diseases, including the human papillomavirus vaccines – Gardasil (Merck & Co) and Cervarix (GlaxoSmithKline), as well as the rotavirus vaccines – RotaTeq (Merck & Co) and Rotarix (GSK).

This development has sparked new interest from leading players in the pediatric and adolescent vaccines market. Driven by the promising commercial potential of new, high-price vaccines, the pediatric and adolescent vaccines market will grow from approximately $4.3 billion in 2006 to over $16 billion by 2016 across the US, France, Germany, Italy, Spain, the UK and Japan (the seven major markets).

Prevnar, the first blockbuster vaccine

Wyeth's Prevnar, the first premium price vaccine, was launched in the US in 2000 as the first infant vaccine protecting against seven serotypes of S. pneumoniae, which can lead to pneumonia and meningitis. Prevnar has experienced a rapid uptake globally and has been integrated into routine childhood vaccination schedules in the US and EU-five soon after launch despite its high cost of nearly $320 for the four-dose regimen.

Global sales reached almost $2 billion in 2006, making Prevnar the first vaccine to attain blockbuster status. Although Prevnar was the first childhood vaccine priced at a significant premium, the large clinical need to protect infants against invasive pneumococcal disease, which can lead to severe illness or death in small children, justified its widespread introduction for healthcare providers. As a result, the product has become a huge commercial success for Wyeth.

This fact, combined with the medical need for a broader serotype coverage, has motivated Wyeth and GSK to develop higher valent candidates, which will protect against a larger number of S. pneumoniae serotypes. These vaccines are expected to reach the market from 2009 and are likely to further extend the commercial success of the class. Datamonitor expects the total value of the infant market for pneumococcal vaccines to increase to $2.3 billion by 2016 across the US, France, Germany, Italy, Spain, the UK and Japan.

Greater public awareness

In June 2006, Merck's Gardasil was the first vaccine to be approved for the prevention of infections with certain subtypes of human papillomavirus (HPV), a pathogen which is causatively linked to the development of cervical cancer. GSK's competing product Cervarix received EU approval in September 2007. As these products are the first to allow prevention of a form of cancer through vaccination, their approval generated huge public attention and resulted in significant pressure on healthcare authorities to make the $360 three-dose Gardasil regimen widely available to teenage girls.

Although most cases of cervical cancer in the developed world can be prevented through the existing pap smear screening programs, the expensive HPV vaccination has been recommended and is reimbursed for teenage girls across the US and Europe. This decision is driven more by public pressure and by the exciting opportunity to vaccinate against cancer rather than by real medical need. The widespread publicity has led to a good uptake in the target group of adolescent girls, which is usually hard to reach for vaccination. As a result, Datamonitor sees a huge commercial opportunity in HPV vaccines, with annual cohort sales of $1.4 billion in teenage girls for the seven major markets by 2016 and a cumulative catch-up opportunity in young women aged 13-26 that could add up to over $17 billion until 2016.

Lack of medical need for rotavirus vaccines

RotaTeq, a vaccine providing protection against rotavirus diarrhea, which usually affects infants under the age of two, was introduced by Merck & Co. in the US in 2006 and is marketed at a price of $200 for the three-dose regimen. In the same year, GSK launched its competitor, Rotarix in the European market at a similar price.

Although both vaccines have been shown to be efficacious and safe, their uptake has been limited so far, since many countries refuse to integrate rotavirus vaccination into their routine vaccination schedules for cost-benefit reasons. In the developed world, rotavirus diarrhea is rarely severe for small infants and quick and efficacious treatment is already available. Consequently, healthcare authorities see no need to widely introduce a very expensive vaccine.

Datamonitor therefore expects total annual sales to remain limited to approximately $1 billion for rotavirus vaccines across the seven major markets by 2016. The US will account for the majority of sales, being the only nation among the seven major markets that has recommended rotavirus vaccination for all infants. The real need for those vaccines exists in the developing world where, without access to clean water, rotavirus diarrhea can often be fatal. However, in the third world, the cost of the vaccine becomes an issue.

Real medical needs and rising disease awareness

The aforementioned examples illustrate that the crucial factor for success in the pediatric vaccines market remains the introduction of a product into national vaccination schedules. Along with reimbursement, this virtually guarantees the rapid uptake and continuously high coverage rates in the target population. At the same time, the new premium-priced vaccines multiply the costs of infant vaccination and pose a significant challenge for budget-constrained healthcare authorities and providers.

Given the lack of awareness about both the severity and costs associated with preventable childhood diseases as well as the benefits and safety of vaccination, vaccine manufacturers need to focus on real medical needs as well as on improving public education in order to ensure commercial success for their products.

Acambis awarded smallpox vaccine contract by US government

Acambis has received a $425 million, ten-year contract from the US Government agency, the Centers for Disease Control and Prevention, to provide it with a warm-base manufacturing capability for Acambis's ACAM2000 smallpox vaccine. Under the terms of the contract, Acambis will establish a US-based manufacturing capability for ACAM2000, deliver against Centers for Disease Control and Prevention (CDC) orders for a minimum of nine million doses per annum for the eight years from year three to year ten of the contract and undertake activities to maintain its product license.

Acambis will establish a US-based manufacturing capability by transferring the ACAM2000 production process to Acambis's facilities in Canton, Massachusetts and Rockville, Maryland.

The CDC will procure at least nine million doses of ACAM2000 a year in contract years three to ten. The structure of the contract allows the CDC to purchase up to 39 million doses in contract years five to ten, should the need arise. This would increase the headline value of the contract to around $660 million. For the dose-delivery activities, Acambis will receive payment on a fixed-price basis.

In addition, Acambis will undertake license maintenance activities throughout the life of the contract on a cost-plus-fixed-fee basis. In the initial years, this includes conducting a Phase IV study in US military personnel, establishing an enhanced surveillance program and myocarditis registry to monitor the safety profile of the vaccine, and undertaking a bridging trial to support a license amendment for transfer of bulk production to its Canton, Massachusetts facility.

Of the $425 million revenues, approximately two-thirds relates to the delivery of doses in contract years three to ten, and one-third to license maintenance activities.

Sources

• U.S.Food & Drug Administration, Center for Biologics Evaluation and Research (CBER)
• The National Vaccine Information Center (NVIC)
• IMS
• WHO
• Yahoo finance
• Datamonitor

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