The New Vaccines Business

By Cliff Mintz Ph.D.

Vaccines, the drugs that shaped the pharmaceutical industry of the 1970s and 1980s, were largely abandoned by most major drug companies in the mid 1990s. Big pharma’s exit from the vaccines business was based on a variety of factors, including 1) the rising costs of manufacturing biologics as compared with small molecule drugs, 2) diminishing market sizes in the developed world, 3) a lack of innovation in vaccine R&D, and 4) the increasing frequency of lawsuits brought against drug companies by persons who were allegedly harmed or injured by their use. By the early 2000s, there were only five major vaccine manufacturers in the world: Merck, GlaxoSmithKline, sanofi-aventis, Novartis, and Wyeth (now Pfizer). However, government-imposed limits on the liability of vaccine manufacturers; improvements in vaccine research and manufacturing capacity; the growth of emerging markets in Asia, South America, and elsewhere; and the advent of so-called therapeutic vaccines have rejuvenated the vaccine business. In 1992, the size of the global vaccine market was estimated to be $2.96 billion. This grew to almost $23 billion in 2008, and the size of the worldwide vaccine market is expected to exceed $30 billion by 2018.

While renewed interest in vaccines has spawned a multitude of start-up companies with novel and intriguing technology platforms, the industry is still dominated by the so-called “big five” vaccine manufacturing companies (mentioned above). One of these companies, GlaxoSmithKline (GSK), has long been recognized as a leading manufacturer of prophylactic childhood and adult vaccines. Since 2008, GSK has garnered regulatory approval and launched a number of new vaccines, including two highly touted, multivalent subunit vaccines. One, called Synflorix, is a vaccine designed to prevent pneumococcal disease. The second, called Cervarix, is an anti-human papilloma virus (HPV) and cervical cancer vaccine.

Martin Andrews, GSK’s senior VP of global vaccines center of excellence, participated in the launch of both Synflorix and Cervarix. A biology graduate, Andrews joined the company in 1985 as a trainee with Beecham Group Plc, after a lengthy commercial management career path in both country-based and global roles. In 1992, Andrews created what is now GSK’s UK Vaccines Business unit. From 2003 to 2006, he was VP and general manager of GSK Finland and in 2006 was promoted to the position of assistant to the chief executive. In 2008 Andrews was appointed to his current position in which he oversees and has overall responsibility for the commercial side of GSK’s global vaccine business.

I had an opportunity to speak with Andrews about the pharmaceutical industry’s renewed interests in vaccines, how globalization and regional competition may be affecting corporate vaccine development strategies, and some of the regulatory and technical challenges that must be overcome to bring new vaccines to market.

Question: Over the past five years or so, there has been a renewed interest in vaccines as commercially viable products. Prior to this time, many industry analysts and pharmaceutical executives didn’t think that the vaccine business was a good investment. What factors have contributed to the changing attitudes about the commercial potential of vaccines?

Answer: There are a number of factors that have sparked the relatively recent renewed interest in vaccines as commercial products. First, there is a huge amount of innovation going on in the vaccine field right now. It is an exciting place to be when you think about the potential for combination vaccines, improved immune responses due to advances in adjuvant technology, and the breakthroughs in immunology that are allowing us to get into therapeutic vaccines, which is a whole new ball game. Second, on a global basis the expectations placed on healthcare and its delivery are rising, and prevention, rather than cure, makes sense from financial and public health perspectives. There are very few products, other than vaccines, that can prevent illnesses from occurring and in the case of therapeutic vaccines, stabilize disease or prevent disease progression. This is elevating the public awareness of vaccines and the impact that they can have on preventative healthcare. Third, unlike small molecule pharmaceutical products, vaccines are less susceptible to erosion by generic competition. This is because the cost of entry into the vaccine business is extremely high, and it is capital intensive. Consequently, if you want to be a serious player in the vaccine business, there needs to be an ongoing and sustained capital commitment to R&D and manufacturing operations. In many ways, the vaccine business is a lot more sustainable and predictable than the small molecule market.

Question: You previously suggested that innovation is one of the main factors behind the renewed interest in vaccines. However, most major pharmaceutical companies, including GSK, have already begun to dismantle their internal R&D programs. Because internal R&D has historically driven pharmaceutical innovation in the past, where do you think the innovation necessary to sustain the vaccine industry will come from if companies continue to downsize and eliminate internal R&D capabilities?

Answer: Interestingly, innovation in the vaccine industry has historically come from a variety of different sources, both internal and external. For example, we have always conducted a lot of external collaboration with academia and smaller biotechnology companies in the early preclinical and clinical phases of vaccine development. Smaller companies generally lack the financial resources to scale their products from the bench to clinical scale. That is why we can be very good partners for smaller companies that may lack the manufacturing capability or experience necessary to advance a product through clinical development. In addition, GSK’s Vaccine R&D has been autonomous from the parent pharmaceuticals division.

As the industry continues to evolve, I think that there will be many opportunities for collaboration with biotech companies. Also, there will be ample opportunities to create innovative and novel public-private partnerships, like the one we established with Brazil’s Oswaldo Cruz Foundation (Fiocruz) to develop and manufacture vaccines for pressing South American public health priorities.

Question: Is vaccine development and commercialization easier or more difficult than it has been in the past? If so, what is responsible for the changes?

Answer: Vaccine development has become more challenging. It is clearly a long development cycle and typically takes about 10 years or more from inception to commercialization. The good news about the vaccine development cycle is that once you get a good immune response to the target agent, and you have a good safety profile, generally speaking you have a vaccine late stage clinical development that is fairly rapid. However, one major thing that has changed, and is most noticeable is the increasing demand for postlicensure commitments — which have exploded in the last few years. This is putting an increasing cost burden on late phase clinical development requirements for vaccines.

Postmarketing studies and surveillance have always been “part and parcel” of the regulatory approval process for vaccines. Nevertheless, I think that regulatory agencies, on the whole, have become more stringent when it comes to postmarketing activities. When introducing a vaccine that will affect the normal course of a disease, it is not unreasonable for public health officials to monitor the product to determine whether or not its effect is sustainable. On the commercialization front, I am not sure that it is any more difficult than it ever was. Again, if you have an innovative solution, then commercialization shouldn’t be an issue. For example, despite the availability of vaccines, there is still an enormous unmet medical need, particularly in emerging markets, for vaccines against childhood illnesses, including rotavirus gastroenteritis and pneumococcal disease, and including pneumonia and other upper and lower respiratory tract infections. Further, if we look forward a few years and focus on chronic diseases like Alzheimer’s disease and cancer, there is a massive unmet medical need that might be satisfied by several of our so-called “smart” or immunotherapeutic vaccines that are currently in clinical development. As long as vaccine manufacturers continue to focus on the areas where the unmet medical need is great, then the future will be very bright for the vaccine industry.

Question: GSK recently launched Cervarix (cervical cancer) and Synflorix (pneumococcal disease). Both products had difficulty garnering regulatory approval in certain regions. What were some of the scientific, technical, and regulatory challenges that had to be overcome to bring these products to market?

Answer: Synflorix and other multivalent pneumococcal polysaccharide vaccines have historically been difficult to create, formulate, and commercialize. When we first started working on Synflorix, we reached a conclusion that simply increasing the valency of the vaccine wasn’t going to result in a superior product. To that end, we made a decision to take a different approach to create a product that was genuinely, not marginally, different from our competitors. Synflorix was developed using an innovative bacterial protein-polysaccharide conjugate platform technology and won regulatory approval in the EU. At this time, we don’t intend to seek U.S. regulatory approval for Synflorix.

With Cervarix, we included a new adjuvant in the vaccine formulation, which was chosen to elicit a stronger and more durable immune response. When we look at data released last year from a pivotal Phase 3 study, the value of the adjuvant is clearly evident. The data show that while Cervarix does not protect against all HPV types, the impact of Cervarix against the overall burden of HPV-related cervical disease results from efficacy against the two HPV types in the vaccine and against certain HPV types not included in the vaccine. This may become important in the overall effectiveness of Cervarix because of geographical variations in the HPV serotypes that cause cervical cancer in different parts of the world, outside of the United States and Europe. Also, it is important to point out that, generally speaking, regulators and physicians are wary about the adoption of new vaccine adjuvants. However, nearly all vaccines are made with adjuvants, an ingredient that helps boost the immune response. Adjuvants have been used in vaccines for nearly 80 years and have been proven to be generally safe, and we have to work harder to make sure regulators and physicians understand adjuvant technology and how they work as it is an evolving field.

Question: In the future, do you see greater growth in prophylactic or therapeutic vaccines?

Answer: The future is bright for both prophylactic and therapeutic vaccines. As I previously mentioned, an unmet medical need still exists for prophylactic childhood vaccines (especially in emerging markets). Further, therapeutic vaccines are gaining wider acceptance and slowly making their way to market especially in the areas of cancer and chronic diseases.

Question: How have variations in national and regional vaccine requirements and increased global competition affected GSK’s vaccine development and marketing strategies?

Answer: First, differences in regional vaccine requirements (because of strain or serotype variations) make us think very carefully about the type of vaccine that we develop. For example, if you compare Synflorix with the previously available seven-valent pneumococcal vaccine, you will find that it contains three additional serotypes because these strains cause serious disease in the developing world. By adding these serotypes to our vaccine, we created a vaccine that can be used in a variety of global locations, especially in places where these serotypes are more prevalent.

Second, it may be possible to eliminate the need to manufacture three or four vaccine variants to meet regional requirements if, when designing a vaccine, special attention is given to developing a vaccine that offers the broadest possible spectrum of coverage.

Third, we recognize that there are diseases in certain parts of the world that are completely unique, and we, as a vaccine manufacturer, have an obligation to develop specific vaccines (if we can) to combat them. A good example of this is the RTSS vaccine that we are developing against malaria, which is absolutely sub-Saharan Africa-specific. Another example is hand, foot, and mouth disease, which is a major problem in China and Asia but not most other places. I think this takes you down a path — which I think will increasingly become a trend — of developing local vaccines to provide local solutions. And, if the patient population is large enough and the unmet medical is sufficiently high, then the local vaccine concept may be a viable one.

Question: Do you think that regional needs, lower cost structures, and the availability of trained personnel in emerging markets like Asia and South America will affect how and where vaccines are developed and manufactured in the future?

Answer: Over the past few years, we started getting involved in R&D and manufacturing partnerships in different parts of the world. For example, we have a partnership in Brazil to develop a Dengue vaccine, which is a high priority in South America. Also, we have a technology transfer agreement with our Brazilian partner (Fiocruz) to manufacture Synflorix as well as a number of other vaccines. Further, we have established partnerships in China and Japan to develop flu vaccines and recently entered into another Chinese partnership to develop a new measles, mumps, and rubella (MMR) vaccine. So, we are looking to partner and localize when it makes sense to localize.

Question: Do you think that emerging national (government) or regional vaccine manufacturers may be able to outcompete large companies like GSK in certain markets?

Answer: At the end of the day, no one should ever lose sight of the need for product quality and safety — especially when it comes to administering biologically active substances like vaccines into otherwise healthy persons, many of whom are children.

I think that vaccine manufacturers like GSK have a lot to offer in terms of product quality, technology, and innovation. Our approach to this is to look for partnerships where we believe that there is added value and mutual benefits to all parties. I think that it is really about understanding the requirements of the region or locality and respecting them. In the end, the relationship has to be mutually beneficial for it to work.

Question: Looking forward, will the vaccine industry of the future look much different from how it looks today? If so, how will it be different?

Answer: I believe that the vaccine industry will always be made up of a fairly small number of large manufacturing companies like GSK. This mainly reflects the intense capital requirements and the need to constantly invest in R&D and manufacturing to insure product reliability and quality. That said, it is likely that regional vaccine manufacturers will emerge in places like China and India in the medium to long term; whether they will become global players remains to be seen.

In terms of the future vaccine product landscape, therapeutic vaccines have the potential to ultimately rival monoclonal antibody-based products. Of course, these are early days, and the success or failure of therapeutic vaccines depends on the results from clinical studies.