IHS Global Insight Perspective | |
Significance | Canadian biotech Microbix signed a joint-venture deal with Hunan Biopharmaceutical to build the world's third largest influenza vaccine plant in China. |
Implications | The move reflects the growing strength and presence of the vaccine field in the Asia-Pacific region, which was especially spurred by the outbreak of swine flu. |
Outlook | The potentially huge demand of the population in Asia as well as the increasingly strong development and production capabilities demonstrated by local biotech and drug firms are likely to prompt more investment from multinational drug makers into Asia's vaccine field. |
Canada-based biotech company Microbix announced that it is going to build an influenza vaccine production facility in China, aimed to be Asia's largest and the world's third largest of its kind, through a joint venture with Hunan Biopharmaceutical, a Hunan Province-owned company. Based on the agreement between Microbix and Hunan Biopharmaceutical, the two companies will set up a 50:50 joint venture to establish a new influenza vaccine production plant with an expected investment of US$200 million and potential manufacturing capacity of 100 million doses of seasonal influenza vaccine annually as well as up to 300 million doses of a single-strain pandemic flu vaccine. According to the companies, the vaccine plant, to be designed around Microbix's Virusmax technology, is expected to start full operation by 2013. This deal has therefore become the latest highlight of the recent momentum the Asia-Pacific region has gained, led by a string of development in China.
H1N1 Vaccine—Market Opportunity Spurred by the Pandemic
Prompted by the influenza A/H1N1 (swine flu) pandemic, the demand for vaccines against the H1N1 virus to provide prevention for the global populace has been ever increasing since the outbreak of the virus earlier this year. In addition to vaccine-making Big Pharmas such as GlaxoSmithKline (GSK, U.K.), Sanofi-Aventis (France) and Novartis (Switzerland), the biotech and pharma companies in the Asia-Pacific region have also jumped on the bandwagon and made noticeable progress in the development and marketing of H1N1 vaccines.
In the wake of the initial outbreak of influenza A/H1N1 in Mexico, the Chinese authorities have responded quickly in terms of both preventive measures as well as the development of vaccines against the virus to meet the potentially huge demand of public health need for the 1.3-billion population. The country's State Food and Drug Administration (SFDA) designated 11 biotech companies for the development of the vaccine in June and granted fast-track regulatory review afterwards. Among the 11 biotechs, Sinovac grabbed the global limelight as its Panflu.1 became the world's first to report positive clinical trial results and to obtains regulatory approval. Others such as Hualan Bio and Shanghai Institute of Biological Sciences (SIBS) followed suit shortly after Sinovac. Outside China, Australian biotech CSL also successfully developed an influenza A/H1N1 vaccine, which secured the marketing approval in its domestic market as well as the United States. In South Korea, Green Cross also clinched domestic regulatory green light for its H1N1 vaccine. Another effort of domestic H1N1 vaccine supply is made in Thailand, where the state-controlled firm Government Pharmaceutical Organisation (GPO) is aiming to start production by the end of this year.
Asia Pacific: Key H1N1 Vaccine Manufacturers 2009 | |||
Country | Company | Development & Regulatory Status | Marketing Status |
China | Sinovac | World's first H1N1 vaccine reporting positive clinical trial results and approved; | Receives government order of 11.5 million doses (China) |
Hualan Bio | Approved by the SFDA in China | Receives government order of 18.2 million doses (China) | |
Tiantan Bio | Approved by the SFDA in China | Receives government order of 4.52 million doses (China) | |
Haiwang Interlong | Approved by the SFDA in China | ||
SIBS | Approved by the SFDA in China | ||
South Korea | Green Cross | Approved by the Korean FDA | Receives 5.86-million-doses order from South Korean government; |
Australia | CSL | Approved by the U.S. FDA and Australia's Therapeutic Goods Administration (TGA) | Receives government order of over 2 million doses (Australia) |
Thailand | GPO | Clinical trial to start in Thailand | |
Taiwan | ADImmune | Reported positive results of clinical trials | |
Increasing Investment and Collaboration Interests from Multinationals
On the other hand, the multinational pharmaceutical companies have also shown increasing interest in expanding their presence in the vaccine field in the region including vaccines for influenza and other infectious diseases. GSK has been among the most active players with its focus specifically on the Chinese market. Earlier this month, it announced the plan of establishing a joint venture with Chinese firm Jiangsu Walvax for the development and manufacture of paediatric vaccine, including its measles, mumps, and rubella (MMR) vaccine Priorix. This followed its earlier deal with another Chinese biotech, Shenzhen Neptunus, to form a JV for influenza vaccine development and production tied up earlier this year. Elsewhere, GSK also entered into a collaborative R&D deal with Japan's Chemo-Sero-Therapeutic Research Institute for the development of new-type influenza vaccines. Companies like GSK and Microbix have undoubtedly set their eyes on both the local biotechs' development and production capability as well as the hugely potential market demand for the vaccines against influenza and other infectious diseases in China, Japan and other Asian markets. French heavyweight Sanofi-Aventis also cast its eyes on Japan, the world's second-largest pharmaceutical market, for the growth of its vaccine franchise. Its vaccine arm Sanofi Pasteur has enjoyed increasing demand for ActHib, a paediatric Haemophilus influenza type-b (Hib) vaccine, imported by its joint venture with Japanese drug major Daiichi Sankyo. Daiichi Sankyo has also stepped up its focus on the vaccine section by establishing its Vaccine Business Planning Department in October, poised to put vaccines among its key core businesses along with generics, new drugs and OTC.
Outlook and Implications
Although either Microbix or Hunan Biopharmaceutical are major players in the vaccine field, their attempt to add a considerable manufacturing capacity to the overall market size around the globe is still a promising development signifying the potential of the industry especially in the Asia-Pacific region. Equally, it has not come as surprising that the multinationals are increasingly enhancing their presence in the Asia Pacific market considering the potential demand for both influenza vaccines and infectious diseases due to the population as well as diseases prevalence in the region. Among all the diseases, influenza vaccine especially faces a high demand. On one hand, the infection and mortality cases of the swine flu pandemic are still rapidly growing, with calls for early and mass immunisations. On the other hand, Asia has also seen higher prevalence of avian influenza (H5N1) than other regions in the world, therefore is in higher need of vaccines against this virus. These, in addition to the population-based seasonal flu inoculation demand, are set to bolster the influenza vaccine market for both existing vaccines and new prevention options. In the case of China, the room for influenza vaccine market growth is huge considering the current vaccination rate is only around 2% for its 1.3-billion populace, far lower than the WHO-recommended 60% vaccination capacity.
In terms of the strategy of entering into the market, it is more likely for the Big Pharmas to invest in the local development and production through joint ventures or other types of collaborations to take advantage of the resources in development, manufacture as well as marketing the local firms have already possessed in the area. Up-and-coming biotech companies, especially in China, South Korea, Taiwan and Japan like Sinovac, Green Cross, and ADImmune, tend to be among the ideal alliance partners for international drug companies. That said, there is also an increasing trend of a booming biotech industry growing stronger to take a position in the vaccine field, which is also going to construct strong competition to the foreign companies in the regional market. Major players in the region, mostly Japanese companies like Daiichi Sankyo, are also main competitors to watch for pharma firms from the United States and Europe as their existing research, production and marketing capacity and channels can be of considerable rival strength.