The commercial outlook for infectious disease vaccines

Vaccines were once generally regarded by the pharma industry as an area with relatively limited revenue opportunities. But with the success of products such as Pfizer’s pneumococcal vaccines Prevnar and Prevnar 13—with combined sales of ~$5.7 billion in 2016 according to data from EvaluatePharma—this perception has changed. Moreover, advances in vaccine technology and the need to combat emerging infectious disease threats such as Zika virus have provided further impetus to the field (see BioPharma Dealmakers B15–B17, June 2016). In this article, we highlight the development of the market and selected deals in the past two years for infectious disease vaccines as well as the level of early-stage financing for vaccine development in general.

Market set for growth

Data from EvaluatePharma on current and predicted future sales of vaccines against a selected group of infectious diseases that make up the bulk of the market indicate that growth is expected in the majority of areas (Fig.1). Overall, the highest-selling vaccines within the selected categories are pneumococcal vaccines, which are widely used in childhood vaccination programs. Between them, they are achieving sales of just over $7 billion currently, and the forecasted level of sales in 2022 is similar. This sector is dominated by Pfizer’s Prevnar products—Prevnar and its follow-up Prevnar 13—which are conjugate vaccines that contain polysaccharides from 7 and 13 different serotypes of Streptococcus pneumoniae , respectively. The other major products are GlaxoSmithKline’s (GSK) Synflorix (a conjugate vaccine that contains polysaccharides from 10 serotypes) and Merck & Co.’s Pneumovax (a vaccine that contains polysaccharides from 23 serotypes), which had sales of $680 million and $640 million, respectively, in 2016.

The market for vaccines against shingles (also known as herpes zoster), which is caused by the varicella zoster virus, is predicted to have the highest percentage increase of the markets analyzed—108% by 2022. The market is currently dominated by Merck & Co.’s Zostavax, which was approved by the US Food and Drug Administration (FDA) back in 2006 and had sales of $780 million in 2016. However, its sales are predicted to drop with the anticipated market entry of GSK’s Shingrix (Fig.1) , which is currently under review by regulators in the United States and Europe. Shingrix differs from Zostavax in that it is a recombinant subunit vaccine, and not a live, attenuated virus vaccine, and clinical trial data indicate that it may offer greater protection in older patients. Merck & Co.’s Varivax vaccine against chickenpox, which contains a lower dose of the same attenuated varicella zoster virus as Zostavax, was the leading attenuated virus vaccine product in 2016 with sales of $820 million, and is predicted to maintain this position in 2022.

The meningococcal vaccines market is also set to grow substantially. The current leading product is Sanofi Pasteur’s Menactra, a meningococcal group A, C, W-135 and Y vaccine, with sales of $650 million in 2016. Close behind is GSK’s Bexsero, a meningococcal group B vaccine gained through GSK’s $20 billion asset-swap deal with Novartis over 2014–2015, which had sales of $530 million in 2016. Its sales are projected to grow to almost $1.2 billion in 2022, but competition from Pfizer’s meningococcal group B vaccine Trumenba is increasing. Trumenba’s sales are predicted to jump from $88 million in 2016 to $820 million in 2022, in part due to its recent approval by the European Medicines Agency (EMA).

A range of influenza vaccines are being marketed and developed by the most companies in the field, and sales of these vaccines are predicted to increase by ~25% from 2016 to 2022. Sanofi Pasteur’s Fluzone is the leading product in this category with sales of ~$1.7 billion (almost 50% of the market) in 2016, which are forecast to grow to $2.1 billion in 2022.

Other notable products within the analyzed data include Merck & Co.’s human papilloma virus (HPV) vaccine Gardasil for cervical cancer prevention, with 2016 sales of $2.2 billion, and the recently approved pioneering dengue vaccine, Sanofi Pasteur’s Dengvaxia, for which sales are forecast to grow substantially to $670 million in 2022.

Vaccine dealmaking

Among the most substantial merger and acquisitions (M&A) and licensing deals in the vaccine area in recent years are two that saw Novartis exit the field. Following on from its $20 billion asset swap with GSK (announced in 2014 and completed in 2015), which included all the non-influenza segments of Novartis’ vaccines unit, Novartis announced the sale of the remaining influenza vaccines business to Commonwealth Serum Laboratories (CSL) for $275 million in 2014. Once the deal was completed in 2015, CSL created Seqirus by wrapping in the company’s existing flu vaccine subsidiary, bioCSL.

Selected product deals over the last two years involving infectious disease vaccine products in development are shown in Table 1. In total, there were almost 50 deals made; the majority were at the preclinical stage, and many deals did not disclose a value. One of the highest-value deals in the field overall with a disclosed value was Pfizer’s $130 million acquisition of GSK’s quadrivalent meningococcal ACWY vaccines Nimenrix and Mencevax, which was announced in June 2015.

One specific vaccine technology area in which there has been substantial deal activity in the past two years is mRNA vaccines for both infectious disease and immuno-oncology applications. Moderna Therapeutics, which is developing products based on its mRNA platform in a wide range of therapeutic areas, has signed several deals specifically for infectious diseases (Table 1; see also BioPharma Dealmakers B3–B4, September 2016). The company recently announced its first human proof-of-concept data for its platform from a phase 1 trial of an mRNA vaccine against influenza. Two other leading mRNA companies, BioNTech and CureVac, have also been active dealmakers in the past two years (Table 1; Nat. Biotechnol. 35, 193–197, 2017).

Early-stage financing

Data from EvaluatePharma on venture financing for vaccine companies overall, including areas beyond infectious diseases, show that more than $2 billion has been raised over the past two years (Fig. 2) and also highlight the resurgence of interest in vaccines in oncology (see BioPharma Dealmakers B6–B7, March 2017). For example, two companies developing neoantigen vaccines have attracted substantial investment: Gritstone Oncology raised $102 million in series A funding in 2015 and Neon Therapeutics raised $125 million in two funding rounds in 2015 and 2017. Among financings related to infectious disease vaccines, CureVac raised $140 million in funding in 2015 and 2016 for the development of its portfolio of mRNA vaccines, which include vaccines for influenza, rotavirus, respiratory syncytial virus and HIV, as well as cancer vaccines.