Vaccines Become Hot Property For Big Pharma

After years of beating a retreat from making vaccines, the world's biggest drug companies are piling back in.

The Wall Street Journal takes a look at three deals Monday that show the business of making vaccines has become hot again. Johnson & Johnson, for instance, agreed to pay $441 million for a stake in Crucell, a Dutch biotech firm, in a deal to collaborate on a single vaccine against all kinds of flu and some other projects.

Many drugmakers turned their backs on the most common vaccines, such as flu shots, after years of low profits and worries about lawsuits. Wyeth gave up making flu vaccine in 2002, after losing money in four of the preceding five years on the business.

 

The exodus of companies from the flu business left the US dependent on two companies for its supply of flu shots a few years ago. When one of those suppliers ran into problems at its main factory in 2004, the US experienced the worst shortage of flu vaccine in history.

But the big push for swine flu vaccine as well as a slowdown in the traditional business of making drugs has several companies reconsidering their bets. Merck, never abandoned vaccines, but hadn't been selling a flu vaccine. Merck made a deal to market Australian vaccine-maker CSL's seasonal flu vaccine in the US starting next year.

Most of the US companies that stayed in the vaccine business have emphasized high-priced vaccines against serious illnesses, such as Merck's Gardasil, against cervical cancer.

The revival of interest in vaccines isn't exactly philanthropic. "If you have a new vaccine for a new type of meningitis or swine flu, that clearly is a major public-health issue and, therefore, the willingness to pay is going to be greater," said Murray Aitken, a senior vice president at IMS Health told the Journal.