Jan. 18 (Bloomberg) -- With the worst flu outbreak since 2009 gripping the U.S., vaccine makers are determined to do better next season. They’re developing powerful vaccines that hold the promise of cutting incidences of flu by the thousands.
The new immunizations represent the broadest flu treatment update in three decades, while more than 200,000 American are hospitalized yearly with the disease, according to U.S. health officials. Health officials were caught off-guard last month when the flu season started earlier than in past years, with 48 states now reporting widespread disease, the U.S. Centers for Disease Control and Prevention said today.
Existing vaccines miss significant quantities of the virus circulating in any given year. This year, for instance, as many as 4 million people may develop influenza from a strain of virus that isn’t included in the current vaccine. Now, Sanofi, GlaxoSmithKline Plc and AstraZeneca Plc are each preparing immunizations that for the first time will cover all four main forms of the virus, including both influenza B strains that often infect children.
“The unpredictability of influenza means it’s best to have the broadest coverage possible,” said Chris Ambrose, vice president of medical and scientific affairs for AstraZeneca’s MedImmune division. “If I am sick, the flu is the flu.”
Because flu is so unpredictable, with different strains becoming dominant year to year, producing a four-in-one vaccine can be a big step forward toward keeping breakouts under control, said John Treanor, chief of infectious diseases at the University of Rochester Medical Center in New York.
Still, making changes to vaccines is a lengthy and expensive process. The cost to develop a novel vaccine that goes even further and provides long-lasting umbrella protection in the face of constantly mutating viruses may be at least $1 billion, said Michael Osterholm, director of the University of Minnesota’s Center for Infectious Disease Research and Policy in Minneapolis. That can be a tough sell for a product that brings in little profit for the companies that make them.
Flu vaccines generate $2.4 billion in sales annually worldwide, according to a November report from GlobalData, a London-based business intelligence provider. The market may reach $3 billion in the next decade with the help of an expanding elderly population and the new four-strain vaccines, GlobalData said.
“Flu is not a big commercial endeavor for any company,” Tony Butler, an analyst with Barclays Plc in New York, said in a telephone interview. “At the end of the day, I’m not sure how much ingenuity they will put into it.”
Drug makers say the severity of this year’s flu outbreak validates their decision to move forward.
“It’s not by any means a high-margin area, but it is a linchpin, a foundation for what you do as a vaccine company,” said Len Friedland, head of clinical and medical affairs at London-based Glaxo’s vaccine division. “It really is critical to our company in terms of what we can do for public health and responsibility that we have to society.”
The current immunizations that cover three of the circulating strains were first introduced in the U.S. in 1981. This year the vaccines are about 62 percent effective.
About 79 percent of the this season’s virus stems from influenza A, mainly an H3N2 strain typically linked to more severe outbreaks. The remainder is from two influenza B strains, both of which will be covered by the new four-strain vaccines to be sold for the next flu season starting later this year.
The four-strain vaccines aren’t the only changes coming next year from vaccine makers.
Protein Sciences Corp. won U.S. regulatory approval on Jan. 16 for a vaccine that can be produced faster than traditional immunizations. The shot, called FluBlok, is produced in less than two months by inserting flu genes into an insect virus and growing the active protein for the immunization.
The closely held company, based in Meriden, Connecticut, and backed by U.S. government contracts, will help the country break from the 50-year-old technique of producing the vaccine in chicken eggs. The egg-based process, which can typically take five to six months, has been blamed for delays in reacting to unanticipated flu outbreaks.
Most seasonal flu vaccines are made by taking versions of the three most-commonly circulating influenza strains and growing the virus in millions of chicken eggs. The virus is then removed from the eggs and damaged so it can’t cause infections. Some strains grow faster than others, and a poorly performing seed virus, can delay production.
AstraZeneca’s intranasal FluMist, which accounts for about 40 percent of immunizations for children, was the first four-strain flu vaccine to get U.S. Food and Drug Administration approval to be sold next season. The London-based company was followed by Glaxo’s product. Paris-based Sanofi is awaiting U.S. approval.
FluMist generated $161 million of AstraZeneca’s $34 billion in 2011 sales, placing it near the bottom for products of which the company discloses revenue. Glaxo’s revenue from Fluarix and Flulaval amounted to about $369 million, or less than 1 percent its businesses, according to data compiled by Bloomberg. Sanofi’s flu vaccines made up 2.5 percent of its $46 billion in 2011 revenue.
Officials at Glaxo, the largest maker of immunizations in the world, said the company is committed to the U.S. market and plans to expand. The FDA approved the company’s four-strain shot Fluarix last month for adults and children ages 3 and older.
Vaccine makers are also starting to aggressively promote their products and boost awareness of flu. Sanofi aired television commercials featuring Henry the Hedgehog, who touts an intradermal injection that goes just under the skin with a needle that’s 90 percent smaller than the traditional shot.
Still, the rate of immunization as of last season was less than 40 percent of U.S. adults.
“Prior to this year, we had two mild seasons,” said David Greenberg, senior director of scientific and medical affairs for Sanofi Pasteur. “My impression is that with a couple of mild seasons, people think it’s not so critical to go out and get an immunization. This is a potentially deadly disease. It varies, but tens of thousands of people die each year from influenza. How do you make that relevant?”
Development and availability of flu vaccines have come a long way since 2004, when contamination at a Chiron Corp. factory shut down production and wiped out half the U.S. supply.
Chiron, since purchased by Basel, Switzerland-based Novartis, was one of only two major producers. Rivals had fled, citing unpredictable demand and the struggle to craft a new shot from scratch each year. While the challenges haven’t changed, seven companies now provide a traditional shot, a high-dose jab, a tiny needle slipped just under the skin or an inhaled form of the vaccine.
“We are making it easier and easier to get the vaccine because there are more choices,” said Joseph Bresee, chief of the epidemiology and prevention branch of the CDC’s influenza division. “Now the challenge is to make the vaccine better.”
The cost to develop better vaccines and the limited profit potential in return will likely prove to be the stumbling block for continued innovation, said Andrew Berens, an analyst for Bloomberg Industries.
“There is a ceiling for how much you can charge for these vaccines,” Berens said in a telephone interview. “I don’t know how much incentive there is for doing research and development in this area.”
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