By Julie Steenhuysen - Analysis
CHICAGO (Reuters) - A dearth of new products, new technologies and fresh commitments by governments scrambling to protect their populations from pandemic threats have lured U.S. drugmakers back into the flu vaccine business.
Three big U.S. pharmaceutical companies announced vaccine deals this week.
Johnson & Johnson, the world’s largest healthcare company by market value, spent $444 million to buy a stake in Dutch biotech company Crucell as part of a new push into influenza vaccine and drug development.
Abbott Laboratories Inc spent $6.6 billion to buy the drugs unit of Belgium’s Solvay, including Solvay’s Dutch cell-based flu vaccine production facility, which can make both seasonal and pandemic influenza vaccines.
And Merck & Co, already a vaccines powerhouse with its shingles and cervical cancer vaccines, got back into the U.S. flu market with a deal to distribute seasonal flu vaccine made by Australia’s CSL Ltd.
Although analysts say the deals are more strategic than game-changing, collectively they have infectious diseases experts heaving a sigh of relief.
“I am very pleased. For a while, a lot of vaccine manufactures simply disappeared,” said Dr. Hildegund Ertl, who directs the vaccine centers at the Wistar Institute in Philadelphia.
“There was this attitude 20 years ago, ‘Let’s not worry about microbes. We’ve conquered them. Let’s focus on cancer.’ Then HIV came along. Then SARS came along. Then H5N1 (avian influenza) came along,” she said.
Ertl said beginning with an outbreak of bird flu in Hong Kong in 1998, the United States and other governments started to offer grants to companies to develop new ways of making influenza vaccines.
That has continued with the current H1N1 swine flu pandemic that started in June. The U.S. government has committed $1.8 billion to companies to make a swine flu vaccine.
“I think it’s finally sinking into politicians’ minds that maybe viruses and pathogens are out to get us and that our infrastructure has really gone to hell,” Ertl said in a telephone interview.
“We have very few vaccine manufacturers in this country,” she said, noting that companies like Wyeth , which is being acquired by Pfizer, dropped out of the flu vaccine market in the United States in 2002 because of high manufacturing costs and commodity pricing.
Five companies make swine flu vaccine for the U.S. market, all ultimately owned outside the United States — AstraZeneca’s MedImmune unit, CSL, GlaxoSmithKline Plc, Novartis AG and Sanofi-Aventis SA.
“The government is now pitching in to try to get interest back, to have more manufacturers make vaccines,” Ertl said.
Both Wyeth and Merck once made influenza vaccines in the United States using conventional egg-based technology.
“They decided it wasn’t worth it,” said Dr. Robert Belshe, director of Saint Louis University’s Center for Vaccine Development. “But with new technologies and the rise in importance influenza vaccine, I think companies are revisiting that now.”
For example, instead of chicken eggs, Solvay makes flu vaccine in cell culture, and Crucell is developing “flu-mAb,” an antibody treatment meant to provide protection from all influenza A strains as well as to treat patients who are already infected.
Belshe said the United States is on the verge of recommending that all U.S. citizens get a flu shot. “We’re at 270 million people who should get vaccinated. It’s a big market. I think manufacturers are just now catching up.”
John Sullivan, director of research and healthcare strategist at Leerink Swann, said all three deals reflect the fact that the pharmaceutical industry has too few products, but “lots of cash and lots of cash flow.”
But he said the deals do suggest a change in direction.
“These deals indicate that infectious disease is perhaps moving up the list of what the managements of some big therapeutics companies care about,” Sullivan said in a telephone interview.
He said the swine flu pandemic has made clear that governments are more willing to pay for products that protect their populations than before.
“If you look at some emerging countries — Brazil, India, China — governments are perceiving healthcare as a good that they can provide to their people, and they increasingly have enough money to do it.”
Editing by Maggie Fox and Cynthia Osterman