Vaccines: Pharma Profit Machines

September 22, 2008

http://www.businessweek.com/globalbiz/content/may2006/gb20060530_035432.html

Business Week online

May 30, 2006

by Kerry Capell

Vaccines: Back on the Front Burner

Once a neglected field, vaccine research is taking off due to fear of

pandemics. And units such as Novartis' Chiron are where the action is.

Compared with glamour drugs designed to battle cholesterol, high blood

pressure, and depression, vaccines have long been the poor relations of the

pharmaceutical industry. After all, ravages such as smallpox, polio, and

measles were long ago cured. But now, thanks to the emergence of avian flu

and other new viruses -- plus improved technology and better economics --

vaccines are becoming the global drug industry's next hot sector.

For proof, simply visit the Siena, Italy, labs of biotech Chiron, a unit

of drugmaker Novartis (NVS ). It was here, tucked between vineyards and

farms in the Tuscan hills, that the world's first avian-flu vaccine was

developed in 1998. " Back then, no one was interested, " recalls Rino

Rappuoli, the scientist who led the research. " Now it's a totally different

story. " With fears that the avian-flu virus sweeping Asia might evolve into

a form that could easily jump to humans, governments are calling on vaccine

manufacturers to find a solution.

Scientists in Siena have developed a vaccine with an ingredient known as

an adjuvant that renders it more effective at low doses. That's a big

advantage, given the current capacity constraints among vaccine

manufacturers. Moreover, Rappuoli's team is also responsible for what's

likely to be Europe's first seasonal flu vaccine produced from cell-based

manufacturing. Expected to hit the market later this year, the cell-based

vaccine can be produced much faster than conventional types, which require

growing flu viruses in millions of chicken eggs.

POOR RELATION NO MORE. Such innovation is one of the main reasons Swiss

pharmaceutical giant Novartis (NVS ) ponied up $5.4 billion for Chiron in

April, 2006. The global vaccine market is worth $10.8 billion today -- less

than the nearly $13 billion in sales generated by Pfizer's (PFE )

cholesterol-lowering drug Lipitor alone.

But analysts reckon the vaccine market will grow much faster than the

market for prescription drugs. " We're in a period where pharmaceutical sales

are growing at 5% to 6% a year, " says Novartis Chief Executive

Vasella. " In contrast, the vaccine industry is looking at nearly 20% annual

growth over the next five years. "

It's a dramatic change for a neglected corner of the giant global drug

industry. Until recently, vaccines simply weren't a very attractive

business. " Pricing was unattractive, margins nonexistent, and there was a

constant fear of litigation, " Vasella says. From more than 20 players in the

1980s, the field of manufacturers shrank to only five today -- France's

Sanofi-Aventis (SNY ), Merck (MRK ) and Wyeth (WYE ) in the U.S., Britain's

GlaxoKline (GSK ), and Novartis.

PROFIT MACHINES. Today, the vaccine business is undergoing something of

a renaissance. That's feeding an explosion of biotech startups targeting

opportunities in everything from new methods of delivery to so-called

therapeutic vaccines that treat diseases patients already have. In 1989,

there were fewer than 10 biotech vaccine companies, but today there are

nearly 200. The number of new vaccines in development also has more than

tripled over the last decade, to 150 today. " It's proof that the business is

waking up and becoming much more interesting, " says Joerg Reinhardt, CEO of

Novartis' newly-created vaccines and diagnostics business.

Credit a convergence of scientific advances, policy changes, and improved

economics. Merck and GlaxoKline paved the way in the late 1980s, when

they developed genetically-engineered vaccines for Hepatitis B. Safer and

more effective than previous drugs, they commanded premium prices that

showed vaccines could be profit machines.

The picture has also improved thanks to tort reform and legislation that

reduced liability risks for drugmakers. And the mapping of the human genome

has exponentially increased the number of targets for new vaccines.

ESCALATING INFO. Novartis' new meningitis-B vaccine shows how far the

industry has come. Scientists had previously managed to develop vaccines for

other strains of meningitis, a potentially fatal infection of the nervous

system, but the B strain, responsible for 50% of cases worldwide, proved

impossible. Chiron's Rappuoli convinced Craig Venter, one of the leaders in

the mapping of the human genome and the founder of land's Institute for

Genomic Research, to sequence the genome of meninigococcus B.

" In 18 months, we acquired more knowledge to develop new vaccines than in

the past 50 years, " Rappuoli says. Novartis is furthest ahead in developing

a vaccine for meningitis B, and potentially will be the first to market a

combination vaccine for meningitis strains for use in infants.

But it's flu vaccines that are expected to drive growth in the immediate

future. Novartis is the second-largest flu-vaccine producer, with 11% of the

market, well behind Sanofi-Aventis' 58% share. Contamination problems at

Chiron's plant in Liverpool forced it to shut down production. Reinhardt,

who reckons the problems will be fully resolved in time for next flu season,

aims to close the gap.

CLOSING THE GAP. Things are already looking up. On May 4, Novartis was

one of a handful of companies awarded multimillion dollar contracts by the

U.S. Health & Human Services Dept. to work on cell-based production

technologies as part of the government's avian-flu pandemic plan. Reinhardt

says the company will use the $221 million contract from the HHS to fund the

construction of a new cell-based plant in the U.S. that will supply the

American market only.

With potential blockbusters in the pipeline, a new plant in the works,

and substantial investment, sales at Novartis' vaccine business could rise

from $1 billion to $3.4 billion by 2012, predicts brokerage Bear Stearns.

Operating profits over the same period could zoom from $207 million to $1.4

billion.

" The old image of the vaccine business as all hassle no profit couldn't

be more wrong, " Vasella says. Now, drugmakers can do good and do well at the

same time.

December 10, 2008

I wanted to send this link to my sister but it said " file not found " when I

clicked on it.

vaccinations@...: vaccineinfo@...: Wed, 10 Dec

2008 09:20:41 -0700Subject: Vaccines: Pharma Profit Machines

" " The old image of the vaccine business as all hassle no profit couldn'tbe more

wrong, " Vasella says. Now, drugmakers can do good and do well at thesame

time. " http://www.businessweek.com/globalbiz/content/may2006/gb20060530_035432.ht\

mlBusiness Week onlineMay 30, 2006by Kerry CapellVaccines: Back on the Front

BurnerOnce a neglected field, vaccine research is taking off due to fear

ofpandemics. And units such as Novartis' Chiron are where the action is.Compared

with glamour drugs designed to battle cholesterol, high bloodpressure, and

depression, vaccines have long been the poor relations of thepharmaceutical

industry. After all, ravages such as smallpox, polio, andmeasles were long ago

cured. But now, thanks to the emergence of avian fluand other new viruses --

plus improved technology and better economics --vaccines are becoming the global

drug industry's next hot sector.For proof, simply visit the Siena, Italy, labs

of biotech Chiron, a unitof drugmaker Novartis (NVS ). It was here, tucked

between vineyards andfarms in the Tuscan hills, that the world's first avian-flu

vaccine wasdeveloped in 1998. " Back then, no one was interested, " recalls

RinoRappuoli, the scientist who led the research. " Now it's a totally

differentstory. " With fears that the avian-flu virus sweeping Asia might evolve

intoa form that could easily jump to humans, governments are calling on

vaccinemanufacturers to find a solution.Scientists in Siena have developed a

vaccine with an ingredient known asan adjuvant that renders it more effective at

low doses. That's a bigadvantage, given the current capacity constraints among

vaccinemanufacturers. Moreover, Rappuoli's team is also responsible for

what'slikely to be Europe's first seasonal flu vaccine produced from

cell-basedmanufacturing. Expected to hit the market later this year, the

cell-basedvaccine can be produced much faster than conventional types, which

requiregrowing flu viruses in millions of chicken eggs.POOR RELATION NO MORE.

Such innovation is one of the main reasons Swisspharmaceutical giant Novartis

(NVS ) ponied up $5.4 billion for Chiron inApril, 2006. The global vaccine

market is worth $10.8 billion today -- lessthan the nearly $13 billion in sales

generated by Pfizer's (PFE )cholesterol-lowering drug Lipitor alone.But analysts

reckon the vaccine market will grow much faster than themarket for prescription

drugs. " We're in a period where pharmaceutical salesare growing at 5% to 6% a

year, " says Novartis Chief Executive Vasella. " In contrast, the vaccine

industry is looking at nearly 20% annualgrowth over the next five years. " It's a

dramatic change for a neglected corner of the giant global drugindustry. Until

recently, vaccines simply weren't a very attractivebusiness. " Pricing was

unattractive, margins nonexistent, and there was aconstant fear of litigation, "

Vasella says. From more than 20 players in the1980s, the field of manufacturers

shrank to only five today -- France'sSanofi-Aventis (SNY ), Merck (MRK ) and

Wyeth (WYE ) in the U.S., Britain'sGlaxoKline (GSK ), and Novartis.PROFIT

MACHINES. Today, the vaccine business is undergoing something ofa renaissance.

That's feeding an explosion of biotech startups targetingopportunities in

everything from new methods of delivery to so-calledtherapeutic vaccines that

treat diseases patients already have. In 1989,there were fewer than 10 biotech

vaccine companies, but today there arenearly 200. The number of new vaccines in

development also has more thantripled over the last decade, to 150 today. " It's

proof that the business iswaking up and becoming much more interesting, " says

Joerg Reinhardt, CEO ofNovartis' newly-created vaccines and diagnostics

business.Credit a convergence of scientific advances, policy changes, and

improvedeconomics. Merck and GlaxoKline paved the way in the late 1980s,

whenthey developed genetically-engineered vaccines for Hepatitis B. Safer

andmore effective than previous drugs, they commanded premium prices thatshowed

vaccines could be profit machines.The picture has also improved thanks to tort

reform and legislation thatreduced liability risks for drugmakers. And the

mapping of the human genomehas exponentially increased the number of targets for

new vaccines.ESCALATING INFO. Novartis' new meningitis-B vaccine shows how far

theindustry has come. Scientists had previously managed to develop vaccines

forother strains of meningitis, a potentially fatal infection of the

nervoussystem, but the B strain, responsible for 50% of cases worldwide,

provedimpossible. Chiron's Rappuoli convinced Craig Venter, one of the leaders

inthe mapping of the human genome and the founder of land's Institute

forGenomic Research, to sequence the genome of meninigococcus B. " In 18 months,

we acquired more knowledge to develop new vaccines than inthe past 50 years, "

Rappuoli says. Novartis is furthest ahead in developinga vaccine for meningitis

B, and potentially will be the first to market acombination vaccine for

meningitis strains for use in infants.But it's flu vaccines that are expected to

drive growth in the immediatefuture. Novartis is the second-largest flu-vaccine

producer, with 11% of themarket, well behind Sanofi-Aventis' 58% share.

Contamination problems atChiron's plant in Liverpool forced it to shut down

production. Reinhardt,who reckons the problems will be fully resolved in time

for next flu season,aims to close the gap.CLOSING THE GAP. Things are already

looking up. On May 4, Novartis wasone of a handful of companies awarded

multimillion dollar contracts by theU.S. Health & Human Services Dept. to work

on cell-based productiontechnologies as part of the government's avian-flu

pandemic plan. Reinhardtsays the company will use the $221 million contract from

the HHS to fund theconstruction of a new cell-based plant in the U.S. that will

supply theAmerican market only.With potential blockbusters in the pipeline, a

new plant in the works,and substantial investment, sales at Novartis' vaccine

business could risefrom $1 billion to $3.4 billion by 2012, predicts brokerage

Bear Stearns.Operating profits over the same period could zoom from $207 million

to $1.4billion. " The old image of the vaccine business as all hassle no profit

couldn'tbe more wrong, " Vasella says. Now, drugmakers can do good and do well at

thesame time.

_________________________________________________________________

Suspicious message? There’s an alert for that.

http://windowslive.com/Explore/hotmail?ocid=TXT_TAGLM_WL_hotmail_acq_broad2_1220\

08

December 10, 2008

, you will notice that the word Business has been included in the URL after

html. Copy & paste into your browser and delete that last word that shouldn't be

there. Then click Enter again & see if it makes a difference.

From: Sisario <lsisario@...>

Subject: RE: Vaccines: Pharma Profit Machines

vaccinations

Date: Wednesday, December 10, 2008, 12:07 PM

I wanted to send this link to my sister but it said " file not found "

when I clicked on it.

vaccinations@...: vaccineinfo@...: Wed, 10 Dec

2008 09:20:41 -0700Subject: Vaccines: Pharma Profit Machines

" " The old image of the vaccine business as all hassle no profit

couldn'tbe more wrong, " Vasella says. Now, drugmakers can do good and

do well at thesame

time. " http://www.businessweek.com/globalbiz/content/may2006/gb20060530_035432.ht\

mlBusiness

Week onlineMay 30, 2006by Kerry CapellVaccines: Back on the Front BurnerOnce a

neglected field, vaccine research is taking off due to fear ofpandemics. And

units such as Novartis' Chiron are where the action is.Compared with glamour

drugs designed to battle cholesterol, high bloodpressure, and depression,

vaccines have long been the poor relations of thepharmaceutical industry. After

all, ravages such as smallpox, polio, andmeasles were long ago cured. But now,

thanks to the emergence of avian fluand other new viruses -- plus improved

technology and better economics --vaccines are becoming the global drug

industry's next hot sector.For proof, simply visit the Siena, Italy, labs of

biotech Chiron, a unitof drugmaker Novartis (NVS ). It was here, tucked between

vineyards andfarms in the Tuscan hills, that the world's first avian-flu

vaccine wasdeveloped in 1998. " Back then, no one was interested, "

recalls RinoRappuoli, the scientist who led the research. " Now it's a

totally differentstory. " With fears that the avian-flu virus sweeping Asia

might evolve intoa form that could easily jump to humans, governments are

calling on vaccinemanufacturers to find a solution.Scientists in Siena have

developed a vaccine with an ingredient known asan adjuvant that renders it more

effective at low doses. That's a bigadvantage, given the current capacity

constraints among vaccinemanufacturers. Moreover, Rappuoli's team is also

responsible for what'slikely to be Europe's first seasonal flu vaccine

produced from cell-basedmanufacturing. Expected to hit the market later this

year, the cell-basedvaccine can be produced much faster than conventional types,

which requiregrowing flu viruses in millions of chicken eggs.POOR RELATION NO

MORE. Such innovation is one of the main reasons Swisspharmaceutical giant

Novartis (NVS ) ponied up $5.4 billion for Chiron inApril, 2006. The global

vaccine market is worth $10.8 billion today -- lessthan the nearly $13 billion

in sales generated by Pfizer's (PFE )cholesterol-lowering drug Lipitor

alone.But analysts reckon the vaccine market will grow much faster than

themarket for prescription drugs. " We're in a period where

pharmaceutical salesare growing at 5% to 6% a year, " says Novartis Chief

Executive Vasella. " In contrast, the vaccine industry is looking at

nearly 20% annualgrowth over the next five years. " It's a dramatic

change for a neglected corner of the giant global drugindustry. Until recently,

vaccines simply weren't a very attractivebusiness. " Pricing was

unattractive, margins nonexistent, and there was aconstant fear of

litigation, " Vasella says. From more than 20 players in the1980s, the field

of manufacturers shrank to only five today -- France'sSanofi-Aventis (SNY ),

Merck (MRK ) and Wyeth (WYE ) in the U.S., Britain'sGlaxoKline (GSK ),

and Novartis.PROFIT MACHINES. Today, the vaccine business is undergoing

something ofa renaissance. That's feeding an explosion of biotech startups

targetingopportunities in everything from new methods of delivery to

so-calledtherapeutic vaccines that treat diseases patients already have. In

1989,there were fewer than 10 biotech vaccine companies, but today there

arenearly 200. The number of new vaccines in development also has more

thantripled over the last decade, to 150 today. " It's proof that the

business iswaking up and becoming much more interesting, " says Joerg

Reinhardt, CEO ofNovartis' newly-created vaccines and diagnostics

business.Credit a convergence of scientific advances, policy changes, and

improvedeconomics. Merck and GlaxoKline paved the way in the late 1980s,

whenthey developed genetically-engineered vaccines for Hepatitis B. Safer

andmore effective than previous drugs, they commanded premium prices thatshowed

vaccines could be profit machines.The picture has also improved thanks to tort

reform and legislation thatreduced liability risks for drugmakers. And the

mapping of the human genomehas exponentially increased the number of targets for

new vaccines.ESCALATING INFO. Novartis' new meningitis-B vaccine shows how

far theindustry has come. Scientists had previously managed to develop vaccines

forother strains of meningitis, a potentially fatal infection of the

nervoussystem, but the B strain, responsible for 50% of cases worldwide,

provedimpossible. Chiron's Rappuoli convinced Craig Venter, one of the

leaders inthe mapping of the human genome and the founder of land's

Institute forGenomic Research, to sequence the genome of meninigococcus

B. " In 18 months, we acquired more knowledge to develop new vaccines than

inthe past 50 years, " Rappuoli says. Novartis is furthest ahead in

developinga vaccine for meningitis B, and potentially will be the first to

market acombination vaccine for meningitis strains for use in infants.But

it's flu vaccines that are expected to drive growth in the immediatefuture.

Novartis is the second-largest flu-vaccine producer, with 11% of themarket, well

behind Sanofi-Aventis' 58% share. Contamination problems atChiron's

plant in Liverpool forced it to shut down production. Reinhardt,who reckons the

problems will be fully resolved in time for next flu season,aims to close the

gap.CLOSING THE GAP. Things are already looking up. On May 4, Novartis wasone of

a handful of companies awarded multimillion dollar contracts by theU.S. Health

& Human Services Dept. to work on cell-based productiontechnologies as part

of the government's avian-flu pandemic plan. Reinhardtsays the company will

use the $221 million contract from the HHS to fund theconstruction of a new

cell-based plant in the U.S. that will supply theAmerican market only.With

potential blockbusters in the pipeline, a new plant in the works,and substantial

investment, sales at Novartis' vaccine business could risefrom $1 billion to

$3.4 billion by 2012, predicts brokerage Bear Stearns.Operating profits over the

same period could zoom from $207 million to $1.4billion. " The old image of

the vaccine business as all hassle no profit couldn'tbe more wrong, "

Vasella says. Now, drugmakers can do good and do well at thesame time.

_________________________________________________________________

Suspicious message? There¢s an alert for that.

http://windowslive.com/Explore/hotmail?ocid=TXT_TAGLM_WL_hotmail_acq_broad2_1220\

08

December 10, 2008

Sorry, that didn't work for me either but it is a 2006 article so it may no

longer be on their server as stated.

From: Sisario <lsisario@...>

Subject: RE: Vaccines: Pharma Profit Machines

vaccinations

Date: Wednesday, December 10, 2008, 12:07 PM

I wanted to send this link to my sister but it said " file not found "

when I clicked on it.

vaccinations@...: vaccineinfo@...: Wed, 10 Dec

2008 09:20:41 -0700Subject: Vaccines: Pharma Profit Machines

" " The old image of the vaccine business as all hassle no profit

couldn'tbe more wrong, " Vasella says. Now, drugmakers can do good and

do well at thesame

time. " http://www.businessweek.com/globalbiz/content/may2006/gb20060530_035432.ht\

mlBusiness

Week onlineMay 30, 2006by Kerry CapellVaccines: Back on the Front BurnerOnce a

neglected field, vaccine research is taking off due to fear ofpandemics. And

units such as Novartis' Chiron are where the action is.Compared with

glamour

drugs designed to battle cholesterol, high bloodpressure, and depression,

vaccines have long been the poor relations of thepharmaceutical industry. After

all, ravages such as smallpox, polio, andmeasles were long ago cured. But now,

thanks to the emergence of avian fluand other new viruses -- plus improved

technology and better economics --vaccines are becoming the global drug

industry's next hot sector.For proof, simply visit the Siena, Italy, labs

of