Interview

'Making vaccines is serious business'

The vaccines market is considered to be a difficult segment of pharma business. Rajesh Jain, the Joint Managing Director of Panacea Biotec, discusses some of the issues associated with vaccine manufacturing with Nandini Patwardhan.

Is the vaccine market poised to grow in the future?

The Indian vaccine market is estimated to be around $500 million with the private vaccine market accounting for around $100 million. The total domestic vaccine market was estimated at Rs 1,800 crore in 2006. The volume of the business is growing with the newer vaccines coming in and companies increasing their production capacities. As per the vision and mission statement contained in the draft National Biotechnology Development Strategy of the Government of India, biotechnology as a business segment has the potential of generating revenues to the tune of $5 billion and creating one million jobs by 2010 through products and services.

The spurt in vaccine market was mainly due to the entry of new players and new vaccines. But in 2000-2001, the growth slowed down to 18-20 percent as the newly introduced brands lowered the prices by 35-40 percent. In 2003-04, the market grew at 18.64 percent and accounted for 47 percent of the total biopharma segment with sales of Rs 1,138.50 crore. Innovative combination products and improved biogenerics shall drive the market for the next five years.

What are the challenges that vaccine makers face?

In the Indian context, the most important issue is to make healthcare affordable. Another challenge is the effective distribution of the vaccine in terms of maintaining cold chain and increasing its outreach. Making vaccines is serious business and one cannot start it in a short span of time. The gestation period is long and the business requires much evolved technology. Besides, the intellectual property has to be very strong.

Today India is in the infancy of immunisation. The vaccine market has to evolve in the country and a lot of effort is required to bring it to a level of maturity. We require huge investments for mass education and awareness. A great deal of work needs to be done on generating clinical data on vaccines, collecting epidemiological data, total disease incidences and disease prevalence. The outreach of vaccines has to be broadened.

What are the most lucrative vaccines?

The Indian vaccine market is dominated by traditional vaccines like Tetanus Toxoid, polio, DPT, typhoid and Hepatitis B. However, the private vaccine market is now witnessing a shift from single traditional vaccines to new innovative combination vaccines. Thermostable combination vaccines shall offer lucrative business opportunities in the vaccine field as it would remove the need for cold chain, which currently costs around $200 million a year. It also extends the shelf life of vaccines thereby saving around $100 million in waste vaccines every year. Thus the vaccine would be made available in remote areas, at extreme temperatures. This will greatly increase the number of children who will have access to these life saving vaccinations and save countless number of lives.

What are Panacea's product offerings in the vaccines segment?

The product portfolio includes branded formulations and vaccines. The formulations include highly innovative prescription products in important therapeutic areas like pain management, diabetes and cardiovascular management, renal disease management, osteoporosis management, anti-tubercular, gastro-intestinal care products and vaccines. The top brands of the company- Nimulid and Willgo for pain management; Glizid and Glizid-M for diabetes; Panimun Bioral and Mycept for kidney transplant rank amongst leaders in their therapeutic segments. The vaccine portfolio consists of oral polio vaccines (Type I and Type III), Enivac-HB (Hepatitis B), Enivac-HB Safsy, Ecovac-4 (DTwP+Hep B), Easyfour (DTwP+Hib) and Easyfive (DTwP+Hep B+Hib). Vaccines for anthrax, dengue, Japanese encephalitis and measles and in the offing.

We are differentiating and beating the competition by introducing innovative technologies with highest quality standards for our products. We have introduced various innovative products like Easyfive (first liquid pentavalent vaccine of DPT+HepB+Hib) which has taken the product beyond price issues. In the coming years, combination vaccines supply to WHO/UNICEF and organic growth of the same vaccines in India would be key drivers of growth.

What kind of business model did Panacea adopt in the initial stages?

We had solid plans to build Panacea Biotec as an innovative, research driven biotechnology and formulations company and had aspiration to become a leader in next five to seven years. There is no doubt that our business model has paid off very well. Our clear goals and objectives; our values have been the guiding stars. Market competition, focus on quality and innovation and commitment of people have greatly influenced our business strategies.

It conforms to the basic ideology of Panacea Biotec that "if there is a healthcare need it would be met by a product or service of Panacea Biotec." Vaccines mark the beginning of healthcare in human life and protect against various lethal diseases. The fundamental principle that 'prevention is better than cure' shall drive the discovery and development of novel vaccines to tackle the various foreseen diseases in a human life.

What are the alliances that have helped you grow in the segment?

In the vaccine segment, we have entered into alliances with CIGB and Heber Biotec, Cuba. For marketing of our vaccines in the private market, we had a 50:50 JV with global vaccines major Novartis vaccines (earlier known as Chiron vaccines). In addition, we have also entered into collaboration with Netherlands Vaccine Institute for IPV vaccine and PT, and Bio Farma, Indonesia for measles vaccine. The JV with Novartis is part of an effort to provide innovative yet affordable vaccines which have extended the repertoire of vaccines.

Can you elaborate on your collaboration with UK based Cambridge Biostability for manufacturing?

Panacea Biotec has signed a long-term licensing agreement with Cambridge Biostability. Under the agreement, Panacea Biotec is to in-license CBL's stable liquid technology to develop, produce and market a stable liquid version of pentavalent and other combination vaccines for the treatment of diphtheria, tetanus, pertussis, Hepatitis B and haemophilus influenza B. This product will be unique in that it will not require storage under refrigeration or reconstitution before use.

Effective December 2006, Panacea Biotec has also acquired a 10 percent stake in CBL. With this product, Panacea Biotec would have global access to a market of around $700 million. The global product launch of this pentavalent vaccine is expected by 2010. The launch of a stable liquid pentavalent vaccine will be a significant milestone and growth driver for both companies.

What are the problems associated with the manufacturing and storing of vaccines?

Extensive funding is required for the manufacturing of vaccines and also it takes time in experimenting. Problems with vaccine storage are common and mainly relate to monitoring of cold storage units or use of freezer units.

A modest outlay to purchase equipment and/or train staff could avoid these problems.

With many companies eyeing a share of the Indian vaccines market, what will be the critical factors for success in this market?

Both Indian as well as multinational companies are playing a key role in meeting the requirements of the huge Indian population. In India about 17 companies are involved in the marketing of over 50 different brands for 15 different vaccines.

Clearly, there is a stiff competition on the price front and companies are launching newer vaccines into the market to increase their revenue. The success of domestic manufacturers would depend on presence of low cost, high quality, innovative, easy-to-administer vaccines.

What are Panacea's key strengths that have assisted your success in the vaccines arena?

The phenomenal jump in revenue of Panacea Biotec has been due to the brisk and consistent business in the vaccine segment. Panacea Biotec has expanded its presence in the vaccine segment generating about Rs 404 crore in FY06. Panacea Biotec is focusing on innovative R&D in a major way. The new innovative combination vaccines namely Ecovac, Easy Four and Easyfive introduced last year have also gained strength in the market and are on the verge of becoming market leaders.

What are vaccines that are in the pipeline?

At present, India produces traditional as well as new vaccines such as Hepatitis A and B vaccines. According to Indian Medical Association (IMA), there are 25 vaccines in the Indian market for different diseases. The largest markets for vaccines in India in ascending order are for Tetanus Toxoid, polio, DPT, Typhoid and Hepatitis B.

Indian and international research organisations and agencies are developing vaccines for anthrax, HPV, HIV, typhoid, Japanese encephalitis, malaria, cholera, rotavirus, colitis, HIB meningitis and other diseases.