GlaxoSmithKline has completed its $1.7 billion-dollar acquisition of Canadian vaccines specialist ID Biomedical, giving it a fast-track into the North American market for influenza vaccines.
Until last year, the flu vaccine market was split mainly between two players – Chiron and Sanofi Pasteur – with other players lagging well behind the leaders. But manufacturing problems that beset Chiron and led to vaccine shortages in the 2004/5 flu season have opened up the market.
GSK’s chief executive, Jean-Pierre Garnier, said the acquisition and other capacity expansions at the firm would allow it to manufacture 150 million doses of seasonal flu vaccine a year by the end of the decade.
ID Biomedical manufactures vaccines via the traditional egg-based production method, and has been ramping up the capacity of its Canadian manufacturing facilities. Beginning in 2007 the company aims to produce around 75 million doses per year of its Fluviral vaccine, which supplies 75% of Canada’s demand and was approved in the USA earlier in 2005.
But GSK said its ambition is to take this capacity as a base, and then improve productivity at ID Biomedical’s facilities using new manufacturing technologies. It will also use the Canadian unit to manufacture next-generation vaccines that are in development.
ID Biomedical also has the contract to meet Canada’s requirements for pandemic H5N1 flu vaccine, and its facility expansion includes a high-containment unit to make pandemic flu vaccines.
Meanwhile, the ID Biomedical purchase is just one part of a major push into the vaccines sector by GSK. In September it acquired a facility from Wyeth which it said would be used to help develop the next generation of vaccines, particularly in flu, and earlier in the year bought out long-term US vaccines partner Corixa for $300 million.
Furthermore, GSK recently won US Food and Drug Administration approval to market its own flu vaccine Fluarix, in time for the 2005-2006 flu season, and has said that it will double production at a flu vaccine facility in Dresden, Germany. Fluarix is not a new product – it is distributed in 79 countries – but GSK had never previously pursued approval in the USA on the grounds that the market there was already saturated and it would not be able to capture significant market share.
GSK is already one of the world’s largest vaccine manufacturers, but believes there is significant growth potential in a market that is shaking off its image as a low-value, commodity sector. Earlier this year the company predicted that the global vaccine market could quadruple in size by 2015 to £17-£24 billion from its current level of around £5 billion.
This growth is stimulating interest and acquisitions in the vaccine sector. Novartis and Chiron agreed to a merger in October, and a few days ago Crucell and Berna Biotech agreed a marriage to help them stay in contention with the bigger vaccine players.
– Earlier this week, Novartis received US regulatory approval to acquire the remaining 58% stake in Chiron that it does not already own. Novartis said that it expects to complete the acquisition of Chiron in the first half of 2006, subject to approval by a majority of its shareholders as well as other customary closing conditions including additional regulatory clearances.
