Biotech companies find progress in vaccine market

When it comes to vaccines, everyone now wants to get in on the action.

That’s according to Paul Bogorad, a senior manager at pharmaceutical and biotechnology consultancy Putnam Associates in Burlington, Mass. He was quoted in the Feb. 3 edition of the Journal of New England Technology

Bogorad and other analysts say that the frenzy over the H1N1 pandemic flu has heightened people’s awareness of the difficulty of making vaccines and has intensified companies’ hunger to do it better. ?

But it wasn’t always so.

In the 1970s and ’80s, companies raced to get out of the vaccine business because of the high manufacturing costs, the high chance of failure, and the threat of lawsuits if patients suffered adverse side effects.

But then the federal government passed the Childhood Vaccine Injury Act in 1986, which created a pool of money for patients who experienced adverse effects and shielded companies from lawsuits. Advances in technology have driven manufacturing costs down.

“And companies have seen that if a vaccine is on a government program, one doesn’t have to spend money to promote it,” Bogorad said.

The market is dominated by a handful of global players, including U.K.-based GlaxoSmithKline, France’s Sanofi Pasteur, Wyeth, which has now merged with New York-based Pfizer Inc., Switzerland’s Novartis AG and Merck and Co. Inc. of New Jersey.

This makes it difficult for smaller players to break in.?? However, this cadre of corporations relies on an ecosystem of smaller companies to fill its pipeline with preventive therapies. That pipeline could grow now that the Bill and Melinda Gates Foundation has pledged $10 billion to fund vaccine research. ??

Bogorad said New England provides a ripe landscape for mergers and acquisitions.

Case in point is Acambis. Sanofi Pasteur bought the Cambridge, Mass., company, which has potential vaccines targeting herpes, influenza, dengue fever and West Nile virus, last year for $548 million. ??

Founded in 2004, Xcellerex Inc., of Marlborough, Mass., has been growing independently.

The company provides outsourced manufacturing services and equipment, using a disposable system that eliminates the need for steam sterilization of bioreactors used to make vaccines and other biologics.

CEO Joe Zakrzewski said the method cuts down on the chances for contamination of vaccines or other products. ??He claims that the process can speed up getting a product to market and that clinical trials using the technology can cost one fourth that of clinical trials using traditional biologics manufacturing methods.

Xcellerex also develops its own therapeutics and has launched a Phase 1 clinical trial for a potential vaccine targeting yellow fever.

Bogorad and other analysts say that the travel vaccine market is a small segment of the market, but Zakzrewski said there is still money to be made.

“Right now, it’s a $100 million market. But 90 percent of the people who need the yellow-fever vaccine don’t get it, because the risks of the current vaccine are too high. So we love it when people say the market is small. We think it could be $1 billion.” ??

Xcellerex officials say that their vaccine candidate is fundamentally different from current vaccines because it uses a dead virus rather than a live one.

Xcellerex has partnered with other companies on manufacturing four or five vaccines in the past. In October, the company announced it would partner with Rockville, Md.-based Novavax to ramp up large-scale manufacturing for its H1N1 vaccine. ??

The perils of this high-stakes business can be seen across New England.

Protein Sciences Corp., in Meriden, Conn., received a blow when the U.S. Food and Drug Administration rejected its potential flu vaccine this fall, because the agency wanted more safety data.

Analysts and public health officials had been watching the progress of the potential vaccine because it would represent a novel breakthrough. While current vaccines for influenza are made from fertilized chicken eggs, which is a slow and expensive method, the Protein Sciences target aims to produce flu cells in caterpillars. ??

Antigenics Inc. in Lexington, Mass., also faced a regulatory setback this fall when European authorities rejected its potential cancer vaccine, called Oncophage.

Cancer vaccines have been elusive targets so far, but officials in New England companies say that is going to change. ??

“We [in the industry] are starting to learn from our mistakes. It’s not a matter of if, but when,” said Eric Von Hofe, CEO of Antigen Express Inc. of Worcester, Mass.

The vaccine developer is working on targets using synthetic peptides, which are protein fragments, that Von Hofe says can be manufactured more quickly than the traditional chicken-egg method. Von Hofe is reporting positive interim results for a Phase 2 vaccine study targeting breast cancer.

But so far, the Food and Drug Administration has approved no synthetic vaccines.