With this year’s influenza season winding down, one may say that the H1N1 pandemic turned out to be more pan(ic) than demic, which is good overall. The several of the world’s major vaccine manufacturers (CSL, Medimmune/Astra-Zeneca, sanofi-pasteur, GlaxoSmithKline, and Novartis) stepped up to the plate and made millions of doses (more than 100 million in the US, Flu.gov), but in the US and Europe has many as half were not used (e.g., Post-Gazette article, and Reuters article). But outside of the major market counties in North America and Europe, the rest-of-the-world (ROW) countries seemed to be last in line for vaccine supplies. This was no surprise and the ROW countries, led by Brazil/India/China (BRIC), have been building out their vaccine R and D and manufacturing capacity for years, not only for the seasonal and potential pandemic ‘flu but also to address their own public health needs like measles, pertussis, tetanus and diphtheria, HIV/AIDS, cholera, yellow fever, Dengue fever, TB, and Chagas. In fact the growing ROW vaccine industry has a nascent trade organization, the Developing Countries Vaccine Manufacturers Network (DCVMN).
The DCVMN was formed in 2005 and has as its mission: “to provide a consistent and sustainable supply of quality vaccines at an affordable price to developing countries” (DCVMN). More specifically, the Network, which includes the leading vaccine manufacturers from India, China, Korea, Cuba, Brazil, Thailand, Vietnam, and Mexico as well as “Resources” like WHO, USAID, and the TB Vaccine Initiative, aims to coordinate efforts and resources so that the manufacturers may attain WHO “pre-qualification” status, meaning that they would be eligible to be suppliers to UNICEF and other UN vaccine purchasers (WHO Standards), a market now worth about $1 billion annually (WHO Immunization Report). Hence, the WHO process, which is based on building intercountry regulatory and public heath systems, should result in companies capable of competing internationally. The DCVMN also benefits from being a member of GAVI Alliance (GAVI Alliance) which over the past eight years has worked to achieve global immunization for childhood diseases (c.f., my posting of January 21, 2010).
Although having an international framework to establish standards and a market is important, the DCVMN companies need more to be viable and competitive with the MNCs. All manufacturing requires capital inputs, and the biopharmaceutical industry is no exception, so investment, private and state, in facilities is needed. Invention of new vaccines is research-intensive, so companies need to access and apply the existing knowledge base. To make vaccines affordable to their public sector customers, companies will need to adopt technical and operational improvements in manufacturing and distribution to keep the costs as low as possible. Finally, technology-based enterprises succeed where there are incentives for continual innovation and entrepreneurs who are wiling to take on risk for reward.
The first need is being met in the BRIC countries to a certain extent by national policies and venture capital investment in acquisition candidates. Outside of the BRIC, investments are likely to be scaled relative to the market opportunity for national or regional vaccines. The second need is being met through the research efforts of the major vaccine companies, the various product development programs like IVAI (IAVI), Malaria Vaccine Initiative (MVI), and the TB Vaccine Initiative (TBVI), and research institutes like the Hillman Laboratories, a joint Wellcome Trust-Merck institute in India (Hillman Press Release) and there are efforts to make the results of this research accessible (e.g., Novartis Vaccine Institute for Global Health).
The meeting the need for affordability is a challenge but the major vaccine companies and the contract manufacturing companies (CMO, e.g., Lonza, and Crucell) have been working on manufacturing improvements to lower costs for years. Crucell, for example, is working with Aeras TB Vaccine Foundation on a TB vaccine manufacturing process (Crucell TB Vaccine), although I could not find any cost projections. For the company members of the DCVMC, the choice may be to use their existing less-efficient processes, license technology from a major manufacturer or CMO (likely expensive), or buy into the next generation of production technology, disposable manufacturing systems. The specifics of these systems are beyond my expertise, but in general they have the advantages being scalable, cost less to install and operate, and can be reconfigured for a different product quickly (c.f., Biopharma article and Biomanufacturing meeting). A pioneer in disposable manufacturing systems is Xcellerex (Xcellerex).
The recent ‘flu vaccine near-debacle threw light on the inefficiencies of the current egg-based approach, and consequently, there is more interest in non-egg and non-mammalian cell cultures that possibly have lower costs. Novavax (Novavax) has gained a lot of media and investor attention for its process to make “Influenza Virus-Like Particles (VLPs)” using insect cell culture. Technovax (Technovax) has a different process of making VLPs and claims lower costs than conventional influenza vaccine methods.
Interestingly, Novavax and Xcellerex seemed to have combined their technologies to create a package that would be affordable and attractive to ROW countries. In November, the companies announced that Xcellerex will make the Novavax H1N1 vaccine for trials in Mexico (Novavax press release), apparently in a facility in Mexico. This may be a one-off arrangement though. In September of last year, Novavax’s CEO said the company was in discussion with at least six countries about ‘flu vaccine production (Reuters article) and in October, announced a joint venture, CPL Biologics, with Cadila Pharmaceuticals Ltd. of India to build a vaccine facility in India that will use VPL technology and “Novavax’s innovative disposable manufacturing solution” (Novavax press release). In the meantime, Xcellerex initiated a trial of its own vaccine for yellow fever (Xcellerex press release), which has a substantial travelers’ market but also is also endemic in Africa and South America causing 30,000 deaths each year (WHO Yellow Fever). To their credit, Xcellerex states it is interested in “Creative Deal Structures for Acquiring Manufacturing Capacity,” that is, deals that will not require cash upfront (Xcellerex Partnering). This could be popular with the members of the DCVMN, and I suggest the Xcellerex BD team contact them if they haven’t already.