A major Indian drug company announced that it would start making a generic version the anti-influenza drug that is in short supply in the face of a possible epidemic of avian flu.

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NYTimes.com

WASHINGTON, (Reuters) -- If vaccines and drugs are available too late to stop bird flu, then what can be done to battle H5N1 avian influenza if it spreads to people? Not a lot, experts say.

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CNN.com

Lisa Jarvis. Chemical Market Reporter New York:Sep 26-Oct 2, 2005. Vol. 268, Iss. 10, p. 22-23 (2 pp.)

LAST WEEK brought the turn from summer to fall, signalling the start of flu season and with it, demand for vaccines. For several years the US flu vaccine market has been undersupplied, but there appears to be renewed interest in investing in US capabilities. Though the margins are modest, the need is enormous, and companies are eyeing a wealth of opportunity.

GlaxoSmithKline recently entered the US flu vaccine market with a bang: within a week of receiving FDA approval for its Fluarix flu vaccine, the company announced it was purchasing Wyeth's vaccine research and production facility in Marietta, Pa., and said it would pay $1.4 billion for Canadian vaccine maker ID Biomedical. The moves build on GSK's $300 million purchase of Corixa Corp., which develops novel vaccine adjuvants.

Though the deals mark the company's entrance into the US market, GSK has sold Fluarix outside of the US since 1992. "We never opted to pursue a BLA [biologies license application] for Fluarix prior because the market has been well served," says a GSK spokesperson.

The company rethought its strategy, however, based on the recent shortfall in supply and concerns over a pandemic.

The entrance of a new player-and significant capacity-can, under normal circumstances, shake up a market. However, industry observers say the flu market is severely underserved, and the addition of GSK will help stabilize supplies.

Just 14 players control 90 percent of the global supply for the seasonal or "interpandemic" market, says John Savopoulos, lead analyst, infectious diseases, at the UK-based healthcare consultancy Datamonitor.

Further, only a small portion of the people that could benefit from immunization actually receives the flu vaccine. During last year's flu season, coverage rates for the groups that the Centers for Disease Control (CDC) defines as high risk were far below the target of 95 percent coverage. And for healthy individuals, compliance was as low as 4.4 percent, says Savopoulos.

With such a limited pool of manufacturers, any disruption in supply can lead to a shortage. According to the CDC, there have been delays or shortages in three out of the last five flu seasons in the US. During the 2004-2005 flu season, the US market was left with a major shortfall after UK regulatory authorities shut down production at Chiron Corp.'s Liverpool, UK, facility, owing to manufacturing deficiencies. The company had intended to deliver 52 million doses of vaccine to the US market.

"Another manufacturer on board will guard against possible supply problems experienced during the Chiron debacle, which can happen at any time due to the long unpredictable nature of the current flugenerating process," says Savopoulos.

Though the flu vaccines market appears to be attracting renewed interest, margins are generally low. Players win on volume, rather than price, but with such a huge gap between supply and demand, there is still significant opportunity for new and old players alike.

The global flu vaccine market was valued at between $1 billion and $1.5 billion in 2002, with the US market accounting for about $500 million. Based on the CDC s demand estimates for 2010, Datamonitor expects the US market will be worth approximately $1.2 billion, which the consultancy says is in line with Sanofi-Aventis estimates.

"This is separate from a 'pandemic market,' which if at full stockpile of a predicted global 720 million doses, could be worth an additional $700 million based on seasonal vaccine prices," notes Savopoulos.

STABILIZING SUPPLY

Both vaccine manufacturers and the US government are also investing heavily to come up with an alternate, more stable flu vaccine production method. Currently, flu vaccines are produced in chicken eggs-a method that is unreliable in both its dependence on the availability of eggs and limited by the incubation period for the eggs.

Producers say that the limited flexibility inherent in the egg-based route would make it nearly impossible to ramp up production in the case of a flu pandemic.

Further, an outbreak of the avian flu, which hit parts of Asia in late 2003 and throughout 2004, could wreak havoc on flu manufacturing.

"The current process is, for the most part, agricultural, and reliant on hens which could then be affected by the avian flu," adds Savopoulos.

With a global flu pandemic becoming a more real concern, manufacturers-with the financial support of the US governmentare scrambling to develop a cell or tissue culture-based flu vaccine production method.

There are several benefits to shifting away from eggs and to a cell culture-based system: production could be quickly increased in the case of a pandemic; the resulting vaccine would be uniform because the strains grown in cell cultures are identical to the original clinical isolates; and there would be less risk of contamination.

GSK, Sanofi-Aventis and Chiron are all working on cell or tissue culture-derived vaccines.

GSK says that its newly acquired Marietta site will also be earmarked for the development and production of a flu vaccine based on tissue culture technology. The company plans to make further investments at the plant once a new tissue culture-based flu vaccine is successfully developed.

This spring, Sanofi-Pasteur, the vaccines unit of Sanofi-Aventis was awarded a $97 million contract from the US Department of Health and Human Services (HHS) to help fund the development of a production process for a cell culture-based flu vaccine. As a result, the company expects to accelerate its cell culture program, targeting completion for Phase I and II clinical trials and initiation of Phase III trials of a cell culture-based flu vaccine at the end of three years-or by spring 2008.

Sanofi-Pasteur is also speeding up by two years its goal of establishing a viable manufacturing process for the new cell culture vaccine, and plans to refit a vaccine development facility to design and test the process from small to mid-sized industrial scale.

The money will also be used to establish a feasibility plan for building a commercialscale cell culture-based manufacturing facility, though it will not cover the actual construction of the unit.

Chiron is also developing a tissue culturebased flu vaccine. The company has a product in Phase III trials in Europe, and in the preclinical phase in the US.