Flu season begins but a vaccine shortage awaits

On , the government announced it was to suspend the manufacturing license of California-based vaccines company Chiron, due to concerns about its manufacturing process. The news came soon after the company had announced a delay in shipment of four million doses since they did not meet sterility standards.

Chiron, one of the world's largest vaccine companies with sales of $678 million in 2003, currently manufactures four flu vaccines, Agrippal, Begrivac, Fluad and Fluvirin. Fluvirin, with 2003 sales totaling $219 million, is the top flu vaccine in the , and , but number two in the , providing 44% of the flu vaccine supply.

Chiron setback, MedImmune opportunity

Although Chiron produces vaccines at a number of facilities worldwide, only the product from the , plant was approved for use. Chiron expected to supply around 46 million doses of vaccine to the , where flu affects an estimated 10% to 20% of the population each year. Although Aventis Pasteur has provided 54 million doses, the shortfall has led to the US Centers for Disease Control and Prevention (CDC) convening an advisory committee to assess its recommendations on who should get the flu vaccine this season. The immunocompromised, young children and the elderly will be the first to receive vaccination.

Chiron's misfortune could become a key opportunity for the less established vaccine manufacturers. Rival vaccine manufacturer MedImmune has announced that it will increase its production of FluMist by one million extra doses: Chiron's setback comes at an opportune moment for MedImmune, as it gives it the chance to boost its FluMist sales which, since the product's launch in June 2003, have been disappointing.

FluMist was the first nasal vaccine launched in the and MedImmune was confident of its product's potential, manufacturing about four million doses, which it decided to sell at a retail price of $60-70. MedImmune predicted sales of $120 million to $140 million. However, consumers seemed unconvinced by the high cost of FluMist and the vaccine made just $30 million in sales in 2003, leading to MedImmune's marketing partner, Wyeth, surrendering its rights in April 2004.

FluMist uptake was partially limited by safety concerns and also by the high cost of the vaccine compared to conventional flu vaccines. However, the massive shortfall in supply in the and other major markets and the willingness of MedImmune to help meet demand could establish the drug as a useful alternative to Fluvarin. Indeed, realigning the price of FluMist to be more in line with the injectable flu vaccines could see significant gains in market share for MedImmune.

Alternative options

The problems with the supply of flu vaccine and accurately assessing which viral strains will be dominant are not new. For example, last year's early influenza season led to heavy demand for vaccination. However last year's vaccines, which were made up of three different flu strains, did not protect against what became the most common strain, more dangerous than the three contained in the existing vaccine.

One promising answer is cell culture vaccines, currently being investigated by a number of companies, such as biotech Vaxin, which expects to start phase I and II studies in 2005. The cell culture vaccine production process offers potential advantages over current egg-based vaccines, most notably flexibility.

Cell culture vaccines may not need an adaptation period to grow in human cells, giving health authorities more time to identify new virus strains or manufacturers time to produce more vaccine if a pandemic occurs. In light of the supply problems expected for the 2004/05 season, such a vaccine could represent the holy grail for patients, physicians and other stakeholders, including the pharmaceutical industry.

Related research:

• Commercial Insight: Vaccines - Reaching Adulthood

• Pipeline Perspectives: Vaccines - Expanding Portfolio Diversity

• Antivirals - A Broad Market Overview