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Datamonitor: Vaccine market overview 2010
Published at 2010-12-21 16:39:29
 
Five companies account for approximately 80% of total global vaccine sales: Sanofi Pasteur, Merck & Co., GlaxoSmithKline, Pfizer, and Novartis. The key reason for this oligopoly is the high barrier to entry for smaller players, which usually have limited manufacturing capacity, and may also lack the resources and the distribution networks required for vaccine development. The vaccines sector has been shaped by numerous new approvals and consolidation, and is dominated by five large players: Sanofi Pasteur, GlaxoSmithKline, Merck & Co., Pfizer, and Novartis. Reported vaccine sales of these five companies account for an estimated 80% of the total market and grew from $7.1bn in 2004 to over $20bn in 2009, representing a compound annual growth rate (CAGR) of 21.6%. The five major vaccines companies concentrate on different focus areas. GlaxoSmithKline, the market leader in 2009, reported sales of $5.8bn in that year. The company's vaccine sales in the first three quarters of 2010 reached $5.1bn. Datamonitor believes that the company is an all-rounder in the vaccines market due to its broad portfolio of vaccines, which includes products for both traditional mass markets (pediatric combination vaccines, hepatitis, and influenza vaccines) as well as vaccines targeting novel indications such as Cervarix for human papillomavirus infection or Rotarix for rotavirus infection. The company's most important products are: the Infanrix and Boostrix franchises (pediatric and adolescent DTP combinations); its hepatitis franchise, including the hepatitis B vaccine Engerix B and the hepatitis A/B combination vaccine Twinrix; Rotarix (rotavirus); Cervarix (human papillomavirus, or HPV); Fluarix (seasonal influenza); and Pandemrix (pandemic influenza). Sanofi Pasteur was the second leading vaccines company in 2009 with sales of $5.7bn, and has registered vaccine sales in the first three quarters of 2010 amounting to $4.3bn. Datamonitor has nicknamed the company "the customizer". This is because one of its key revenue sources is its pediatric vaccine franchise, and Sanofi Pasteur very efficiently maximizes revenues from this highly commoditized sector by providing tailored combination vaccines to the immunization schedules of individual countries. The company's infant combinations, meningococcal vaccines, and influenza vaccines are its core franchises. On an individual product level, Menactra, Daptacel, Adacel, Pentacel, and Fluzone have been the strongest growth drivers. Merck & Co. occupied third position in 2009 with sales in excess of $4.4bn. However, it must be noted that 2009 sales were under-reported due to M&A-associated changes in reporting structure. The company's vaccine sales in the first three quarters of 2010 reached $3.0bn. Over the past five years, Merck & Co. has been the most innovative among the five players due to its successful portfolio of novel, high-price vaccines such as Gardasil, Zostavax, and RotaTeq. The company's most important franchises are HPV, rotavirus and MMR-varicella vaccines. Novartis was the fourth leading vaccines company in 2009. The company's vaccines and diagnostics division reported 2009 sales of $2.4bn in 2009. Division sales in the first three quarters of 2010 grew to $2.6bn, driven by significant windfalls from H1N1 pandemic vaccine sales in the first half of the year. Prior to its acquisition of Chiron in 2006, Novartis was not active in vaccines, making the company a relative newcomer in the field. The company's strength lies in its influenza and meningitis franchises. As a result, its key products are Fluvirin, Menveo, and its pandemic influenza vaccine franchise. Pfizer, following its acquisition of Wyeth, became the fifth largest vaccines player in 2009 with sales in excess of $1.8bn. As with Merck, this figure is under-reported due to M&A-associated changes in the reporting structure. In the first three quarters of 2010, sales grew to $2.6bn. Wyeth's success in vaccines has been built largely on the back of a single product: the pneumococcal conjugate vaccine Prevnar. For this reason, Datamonitor has termed the company "the one-hit wonder". The Prevnar franchise, consisting of Prevnar 7 and the more recently launched Prevnar 13, is the strongest contributor to growth. Highly commoditized and established sectors, such as influenza, hepatitis, and pediatric vaccines, still account for the vast proportion of global vaccine sales. The outbreak of the H1N1 pandemic in 2009 led to substantial windfalls for all major flu vaccine players, with GlaxoSmithKline, Sanofi Pasteur and Novartis reporting combined pandemic influenza sales of $6.4bn in 2009 and the first half of 2010. However, these high revenue gains will be short-lived, given that pandemic stockpiling has considerably subsided in 2010. On a product level, novel, innovative vaccines stand out as being particularly successful. Pfizer's Prevnar and Merck & Co.'s Gardasil have achieved blockbuster status, with 2009 global sales of over $1.5bn each, while the quadrivalent conjugate meningitis vaccine Menactra (Sanofi Pasteur), the infant combination vaccine Pentacel (Sanofi Pasteur) and the rotavirus vaccine RotaTeq (Merck & Co.) each achieved 2009 global sales in excess of $500m. The commercial outlook for new entrants in the vaccine space varies significantly. Pfizer has built a vaccines franchise through the acquisitions of PowderMed (2006), Coley (2007) and, most importantly, Wyeth (2009). Through the latter, Pfizer gained access to the blockbuster Prevnar franchise, an attractive vaccine pipeline, and an experienced team, providing an excellent outlook for Pfizer's future in vaccines. In 2007, AstraZeneca entered the vaccine space through the acquisition of MedImmune, which markets the intranasal influenza vaccine FluMist. While the company gained some windfalls from the 2009/10 H1N1 pandemic, FluMist's overall commercial performance has been disappointing, and Datamonitor expects AstraZeneca to remain a niche player in vaccines. Similarly, Abbott obtained an influenza vaccine franchise through acquiring Solvay's Pharma business in 2009. However, due to portfolio considerations as well as a lack of competitiveness in this sector, Abbott attempted to sell its vaccine business shortly after the acquisition. Failing to attract a buyer, the company announced in September 2010 that it would cease most vaccine R&D activities and mainly continue to produce and sell its seasonal influenza vaccine Influvac. The latest new entrant is Johnson & Johnson, which made an offer to fully acquire Dutch vaccine maker Crucell for $2.3bn in September 2010. Datamonitor believes that Crucell's attractive vaccine portfolio and pipeline would further reinforce Johnson & Johnson's already strong position in the infectious diseases sector. These developments illustrate that, as the vaccines business differs significantly from other sectors of the pharmaceutical industry regarding clinical development, production, marketing and distribution, expertise, and know-how, as well as a well-planned strategy, are particularly vital for success in this challenging area. Datamonitor: Infectious Diseases Vaccine Market Overview