It's nothing to sneeze at.
Considering the consternation and confusion caused last year when flu vaccine maker Chiron (NASDAQ:CHIR) had to dump half of this country's supply into the Thames because of contamination issues at its British manufacturing facility, news of a new entrant into the vaccine market is welcome.
As Foolish contributor Brian Gorman pointed out yesterday, pharmaceutical giant GlaxoSmithKline (NYSE:GSK) announced that it would begin providing flu vaccine to the United States, should the FDA grant approval. The agency has been under the gun since the Chiron debacle to expand the number of companies providing vaccines, and Glaxo will join Chiron, Sanofi-Aventis (NYSE:SNY), and MedImmune (NASDAQ:MEDI) on the approved-providers list.
What's surprising is how long it took for Glaxo to move into the flu vaccine business in the U.S. It is already the world's largest manufacturer of vaccines, and it just received approval for an adolescent booster shot for whooping cough, which has been on the rise and causes about 40 to 50 deaths each year, primarily in infants. Glaxo also just received positive results for phase 2 trials of its cervical cancer vaccine; it proved 100% effective against the most common strain of virus, which causes 70% of such cancer. While Glaxo will file for European approval next year, it won't give a timeline for filing in the U.S.A.
A strict regulatory climate in the United States has hastened the demise of the once-vibrant flu vaccine market. When Fluarix was first introduced in 1992, the U.S. had as many as 10 manufacturers; in the 1960s, there were as many as 26 companies. While mergers and acquisitions have taken out a few, government pressure to keep prices low has forced out a lot of manufacturers. In addition, the government buys up some 55% to 60% of the pediatric vaccines, further limiting the market. It's another reason why the FDA is under pressure to expand the list again, seeking to grow the number of manufacturers to as many as seven by 2007.
Glaxo is almost certain to win regulatory approval for Fluarix, as it shipped an emergency batch of some 4 million doses last year during the crisis. They were imported as an "investigational drug," which means patients had to sign a consent form prior to receiving the shot. It sells the vaccine to more than 75 countries around the world, but until recent upgrades, Glaxo's production facility was operating at full capacity. Glaxo's upgraded factory could now provide the United States as many as 10 million doses.
Sanofi-Aventis will probably provide around 60 million doses this year, and Chiron has said it could make as many as 30 million if it wins back full regulatory approval. With MedImmune providing another 3 million doses of its FluMist nasal-spray vaccine, the country would have sufficient supplies this year.
It surprises many to know that influenza kills between 40,000 and 50,000 people every year. A stable supply of vaccine can go a long way toward curing what ails the industry.
Inoculate yourself with these related Foolish articles:
- Chiron's Mythical Flu Vaccine
- Flu Vaccines' Unhealthy Competition
- Regulators Quarantine Chiron
- It's Half-Time at MedImmune
Fool contributor Rich Duprey has missed writing about Chiron. He does not own any of the stocks mentioned in the article. The Fool has a disclosure policy.
