Is there a Bottom Line Behind the Headline?

Recently, the Welcome Trust, the British giant philanthropy, and Merck and Co., a leading member of Big Pharma, announced a “first of its kind” joint venture to advance vaccine development for diseases of the low-income countries (September 17, 2009, Merck press release).  While the venture’s objectives and funding are commendable, after a closer look for the bottom line (i.e., creating affordable, new vaccines) I’m inclined to view it as a well-intentioned effort that will fall short.

As described in the release, Welcome and Merck, specifically Merck’s Indian subsidiary, MSD, are going 50/50 on about $130 M of funding in a 7-year commitment to set up and operate a R and D facility in India that will develop new vaccines and possibly improve existing vaccines for developing world use.  The facility, named the Hilleman Laboratories after Maurice Hilleman, the outstanding vaccinologist of the 20th century, has as its vision, as given in the press release but oddly not on the Laboratories’ website (Hilleman Laboratories):  “A Sustainable, Not-For-Profit Operating Model to Turn Innovative Science into Practical Solutions for Those in Greatest Need.”  Although not made explicit in the release or on the website, the Operating Model seems to be that the Laboratory will invent (or acquire from academia?) candidate vaccines, conduct preclinical studies (with direct help form Merck?: “The Hilleman Laboratories will work to advance projects to ‘proof of concept’ by providing key expertise in product development and optimization that is typically available only within large vaccine companies”), conduct some degree of CMC/manufacturing development (“The Hilleman Laboratories will also work with vaccine manufacturers to ensure production can be scaled and that the vaccines are affordable”), and then?  It is not clear who/what/how will handle the clinical testing, registration, manufacturing, and distribution, i.e., the heavy lifting needed to get a vaccine into people’s arms.  Maybe no-cost licensing to PDPs (product development partnerships) already working on vaccines like the Sabin Vaccine Institute, Malaria Vaccine Initiative, International AIDS Vaccine Initiative, and Global Solutions for Infectious Disease?  Nothing beyond “productive partnerships” is mentioned.  Maybe out-licensing to for-profits with dual market objectives?  The press release has no comment on a business development/licensing function, just a hint that the founders “envisage” that the Lab will receive compensation for its innovations when used in higher income markets.

Further, it is not clear who in the organization will have the experience to watch the bottom line and build a truly sustainable operation that can deliver the goods.  The Chief Executive Officer is Altaf Lal, clearly a highly experienced scientist and bureaucrat.  The two named advisors are from the UK government and WHO.  Granted Dr. Lal is probably building his organization now, but I would hope he is engaging professional (non-academic) vaccine developers as employees and former/current biotech/Pharma executives as advisors.  I’m sure BIOVentures for Global Health could be helpful in the recruiting process for both employees and advisors.

So what’s in this for Merck?  Certainly good (and deserved) PR.  A cynic may say also a chance to guide the Laboratories’ project selection away from the development of competing products, but this is not likely since Merck has a solid history of corporate responsibility in global health (its donation of ivermectin to treat onchocerciasis/river blindness began in 1987) and has substantial R and D and access programs (Merck GH CR).  I would hope that Merck sees the Laboratories as an opportunity to attract academic ingenuity and generate vaccine candidates for its pipeline, i.e., get serious about making profitable vaccines for low-income markets.  Although the funding is helpful ($10M per year is less than half of one percent of its overall R and D budget), Merck’s direct involvement in the commercialization stages (i.e., product realization) is needed and would truly make the Hilleman Laboratories a venture and an innovation in developing affordable vaccines.


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