At the World Vaccine Congress Asia, it became apparent that new local facilities and partnerships are essential to expand supply, thus providing openings into the emerging vaccine markets of the region. GlaxoSmithKline and Sanofi Pasteur are leading in the space, overcoming low levels of disease awareness and financial shortages to secure a strong foothold in Asia.
Several important factors need to be considered in order to successfully penetrate the vaccine markets in Asia. The first point raised at the World Vaccine Congress Asia, held in Singapore from June 8 to 11, 2009, was that a significant local, on-the-ground presence is a huge advantage over supplying from the US or Europe. It allows vaccine manufacturers to optimize interaction with Asian political, regulatory and clinical stakeholders and can also help to cut manufacturing and transport costs.
There are two approaches to achieve this localized presence: either through establishing proprietary facilities, such as GlaxoSmithKline's plant in Singapore or Sanofi Pasteur's plant in Shenzhen, China; or through partnering with local manufacturers, such as GSK's alliance with Neptunus. Other important stakeholders to consider for partnerships for the Asian markets are non-governmental organizations, including the Bill and Melinda Gates Foundation, the Global Alliance for Vaccines and Immunization (GAVI), PATH, the International AIDS Vaccine Initiative (IAVI) and Aeras. These groups can provide funding for both R&D and vaccine purchasing, and have become important drivers of vaccine development and introduction for the Asian markets.
Low levels of vaccine and disease awareness represent another major hurdle for vaccine developers, and can often lead to limited political support for the introduction and adoption of immunizations. Therefore, funding awareness campaigns and disease surveillance systems could help vaccine producers overcome these obstacles in order to increase the market opportunity in Asian countries.
The shortage of financial resources is another key issue, particularly for novel vaccines which are not yet eligible for GAVI support. Innovative pricing strategies, such as tiered or differential pricing, could help manufacturers to maximize uptake in emerging markets in Asia. As an example, GSK's CEO Andrew Witty said in an interview with the Financial Times that a 60% price reduction in the Philippines for Cervarix, the cervical cancer vaccine, had increased sales eightfold.
Several vaccine manufacturers, including Wyeth, Novartis and Merck & Co., are already marketing vaccines in Asia, but GSK and Sanofi Pasteur have shown the biggest commitments to date. GSK used the conference to highlight its ambition and leadership in the region by announcing two major developments: the opening of its new $600m vaccine plant in Singapore, and a joint venture with China-based Neptunus for influenza vaccines. Michel Baijot, vice president of business development and strategic alliances for GlaxoSmithKline Biologicals, stressed the company's strong focus on creating local presences through establishing its own local manufacturing capacities, as well as closing deals and alliances with local vaccine manufacturers. To justify this strategy, he pointed out Asian governments' preference for local players in terms of both financial support and tender allocations. The opening of GSK's $600m Singapore vaccines plant on June 9 is a strong indicator of the company's plans for the region. The 85,000 square meter facility will initially produce pneumococcal vaccines for children.
The company's simultaneous announcement of a new joint venture with Shenzhen Neptunus Interlong Bio-Technique Co. (NIBT) is similarly significant. According to GSK, the alliance's aim is to develop and manufacture vaccines for seasonal, pre-pandemic and pandemic influenza vaccines for China, Hong Kong and Macau. While GSK is providing access to its adjuvant system with a view towards improving efficacy and reducing antigen amounts used, thereby increasing the number of vaccine doses that can be produced, Shenzhen Neptunus is contributing additional local manufacturing capacity and R&D expertise. Both companies agreed to invest further in manufacturing, and are contributing cash and assets amounting to a total of approximately $84m to the joint venture.
The deal expands GSK's presence in China, where it had previously entered a promotion service agreement with Chinese vaccine company Sinovac in 2007. Through this deal, GlaxoSmithKline China began selling and distributing the adult dosage formulation of Sinovac's seasonal vaccine Anflu, while Sinovac retained responsibility for the pediatric dosage formulation.
Since 1996, Sanofi Pasteur has also been active in China and already operates a vaccine filling and packaging facility in Shenzen. In 2008, it began construction of an influenza vaccine manufacturing plant with a capacity of 25 million doses, which can potentially be expanded to 50 million. When Sanofi announced the plans in December 2007, this $100 million facility was expected to become Asia's biggest vaccine factory. This has since been outdone by GSK's plans for Singapore. In contrast to GSK, however, Sanofi chose to build a major new facility for dengue vaccines in France, close to its Lyon headquarters, despite the majority of demand expected to come from emerging markets in Asia and Latin America.
GSK's deals reflect Andrew Witty's strategy to increase the company's footprint in emerging markets and confirm GSK's ambition to emerge as a key vaccines player in Asia. Owing to their significant and historic presence in the region, both Sanofi Pasteur and GSK are a big step ahead of their competitors, most of which as yet lack a local presence.