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pnpCall 2009 the Year of the Vaccine, or at least the Year of the Vaccine Shortage, as supplies of H1N1 influenza vaccine fail to keep pace with demand from governments around the world. Still, H1N1/swine flu has been good for the handful of biopharmaceutical companies that have garnered billions of dollars in largely unanticipated vaccine sales. The increased attention has also helped spotlight smaller companies developing vaccines for other conditions and perfecting methods to replace the cumbersome technique of growing antigen inside chicken eggs.

“Our experience with the ups and downs of the vaccine manufacturing process has made clear the need to enhance our country’s vaccine manufacturing capability,” said Health and Human Services (HHS) Secretary Kathleen Sebelius in congressional testimony. “Not only are we dependent on companies based in other countries, we are using decades-old technology that must be improved upon,” she told the Homeland Security and Government Affairs committee in October.
The global market for vaccines is projected to more than double from $16 billion in 2007 to $35 billion in 2014, far outpacing growth rates for most other pharmaceuticals, according to Scientia Advisors LLC, a Cambridge-Mass. consulting firm. This builds on a near tripling in sales from 2000 to 2008, according to the World Health Organization’s most recent report on vaccines and immunizations. Most of this expansion came from sales in industrialized countries of newer, more costly vaccines, which account for more than half of the total value of vaccine sales worldwide, WHO said.

So far this year, governments worldwide have ordered nearly 600 million doses of H1N1 vaccine and adjuvants worth $4.3 billion with the potential for adding another 342 million more doses worth $2.6 billion, according to the JPMorgan investment bank. This $7 billion in sales will provide a mini-booster shot for biopharmaceutical manufacturers which, like other big pharmas, are desperate to replace revenues lost to generic competition as blockbuster drugs lose patent protection.
Vaccines also occupy a nicely protected niche. Unlike their small-molecule chemical counterparts, biological drugs cannot be easily produced. At the moment, only six egg-based vaccine production facilities are licensed in the U.S., creating a steep barrier to entry for would-be competitors.

In addition, the FDA does not allow the marketing of “follow-on” or so-called generic biologics in the U.S., although bills to do so are being debated in Congress. And vaccine manufacturers enjoy partial immunity from liability lawsuits through the 1986 National Vaccine Injury Compensation Program, designed to encourage vaccine manufacturing after dozens of companies—hit with numerous and costly lawsuits—got out of the business in the 1970s and 1980s.

Today, government agencies are increasingly willing to purchase and stockpile large quantities of vaccines for naturally occurring diseases, such as H1N1, H5N1 avian influenza A, and SARS as well as against potential bioterrorism agents, such as anthrax (Bacillus anthracis) and plague (Yersinia pestis). As a result, the global vaccine market is viewed as both growing and reliable, even though pressures exist to supply vaccines at low or no cost to under-developed and less-wealthy nations.

This year, HHS contracted with five companies to produce 250 million doses of swine flu vaccine for around $1.5 billion: Novartis AG (Switzerland), GlaxoSmithKline plc (London, UK), CSL Ltd. (Australia), Sanofi-Aventis SA (Paris, France), and MedImmune LLC (Gaithersburg, Md.), a unit of AstraZeneca plc. All manufacture injectable H1N1 vaccine except MedImmune, which produces the vaccine in a nasal spray similar to the company’s FluMist treatment for seasonal flu.
But as of mid-November, only 41.6 million doses of H1N1 vaccine had been distributed in the U.S., less than Washington’s overly optimistic projection, which was based on early company estimates. The shortfall was caused by several factors, including unexpectedly low antigen yields and “manufacturing glitches,” as Sebelius put it.

 

Company NameDoses (Millions)
Novartis AG90
GlaxoSmithKline plc7.6
CSL Ltd.36
Sanofi-aventis SA75
Medimmune LLC40

Breakdown of the suppliers of the 250 million doses of H1N1 vaccine to the US government.

Initial production of H1N1 antigen, using “seed” virus strains supplied by the Centers for Disease Control and Prevention(CDC) and WHO, turned out to be one-fifth to one-half what would be expected from typical seasonal flu antigens. Because it takes 6 to 9 months to produce vaccine using eggs, several companies didn’t even know they were experiencing lower yields until a potency test became available in August. The companies have since obtained other “seed” strains and have expanded their production capabilities.

Worldwide, the manufacturing capacity for seasonal influenza vaccine is only about 300 million doses per year. Recognizing limitations of egg-based vaccine production, the U.S. government has been seeking to expand alternatives and has awarded more than $2 billion to help construct commercial cell culture facilities. In November, Novartis opened the first large-scale cell culture facility in the U.S. to manufacture pandemic vaccines. HHS awarded the company $486 million over 8 years to build the Holly Springs, N.C. plant, which will have the capacity to produce 150 million doses of  vaccine annually after it becomes fully operational in 2012.

Cell culture technology is far from new, and has been used since the 1950s to manufacture vaccines against chicken pox, hepatitis A, measles, polio, and other well-defined diseases. Because it does not rely on vast quantities of fertilized eggs, cell culture has the potential to shave months off the 6 to 9 month egg-based production cycle. Baxter International Inc., (Deerfield. Ill.) has produced commercial quantities of H1N1 vaccine at its large-scale cell culture facility in Bohumil, Czech Republic, and in October received authorization to market the vaccine in the European Union, the first cell-culture based vaccine to win such approval.

Other technologies under development include using virus-like particles (VLPs), recombinant antigen, and DNA vaccines. Novavax Inc. (Rockville, Md.), a small clinical stage biotech, is creating a range of influenza and other vaccines using VLPs, which are structurally similar to authentic virus but do not contain a genome and are, therefore, incapable of a spreading infection. Connecticut-based Protein Sciences Corp. is testing recombinant vaccines derived from an insect known as the fall armyworm (Spodoptera frugiperda), common throughout the southeastern US.

About the Author
Contributing editor Ted Agres, MBA, is a veteran science writer in Washington, DC. He writes frequently about the policy, politics, and business aspects of life sciences.

This article was published in Drug Discovery & Development magazine: Vol. 12, No. 9, October, 2009, p. 8.

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