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public health responses, said Karen Midthun, director of the FDA’s Center for Biologics Evaluation and Research, when Protein Sciences’ new vaccine was approved Jan. 16.
“The new technology offers the potential for faster start-up of the vaccine manufacturing process in the event of a pandemic, because it is not dependent on an egg supply or on availability of the influenza virus,” Midthun said in an FDA statement.
But whether that technological advance will cause doctors or patients to clamor for the recombinant flu vaccine is uncertain, Kartikeyan says, because it has not proven more effective than other vaccines in clinical trials.
Protein Sciences could try competing by setting a lower price per vaccine shot, says Kartikeyan’s colleague, GlobalData analyst Brad Tebbets. The company’s process has the potential to produce antigens more cheaply than other methods, Tebbets says.
But Cox, Protein Sciences’ CEO, says she’s preparing to take the opposite approach. Market studies indicate that the company’s vaccine could be positioned as a premium product worth a higher price, rather than a “me-too” flu vaccine, Cox says. The vaccine is free of ingredients that some people don’t want in a shot, she says.
The vaccine has, for example, a built-in potential market among people who are allergic to eggs. The company has built a database of such people looking for alternatives to other vaccines. Cox says the vaccine could also be attractive to vegans and health conscious people who have expressed concerns about preservatives and other elements sometimes found in more traditional flu vaccines. Also, some young people incorrectly believe that they can become infected through traditional flu shots, she says, and so Protein Sciences has been emphasizing that Flublok’s manufacturing process doesn’t include the use of live flu virus.
“People want something pure,” Cox says.
Kartikeyan says this marketing strategy could draw some fire from other vaccine makers. Scientists and doctors have seen no links between vaccine ingredients such as preservatives and the health outcomes that people fear, she says.
Cox, however, says unfounded perceptions may discourage some people from getting vaccinated. Her company’s formula might allay their concerns, she says.
Protein Sciences is now hiring a marketing expert, and exploring distribution channels to reach likely customers for the vaccine. The company is, for instance, trying out a distribution arrangement with FFF Enterprises of Temecula, CA, which is experienced in delivering small quantities of flu vaccines to doctors’ offices. But Cox says she’s also looking for outlets like the natural grocery chain Whole Foods, which attracts the kind of health-conscious patrons that might be interested in her company’s vaccine.
Cox says the company may set its initial price for the shot at $30, though the cost might come down as Protein Sciences scales up production. Eventually, the company could make as many as 10 million doses at Pearl River, and may later contract for production of much larger batches for the United States market at a plant in Japan operated by its partners UMN Pharma and Astellas, which have the rights to develop the vaccine for the Japanese market.
A $30 price tag could limit adoption of the vaccine, Kartikeyan says. Health insurers might balk, when the average payment to vaccine manufacturers is in the range of $6 to $12 per dose, she says. Kartikeyan and Tebbets wrote in a recent GlobalData report that Protein Sciences’ product will compete directly with vaccines such as Novartis’ Fluvirin that, like Flublok, include proteins from three different viral strains every year. Such vaccines are called “trivalent.”
But GlobalData analysts see the more serious competition from the new “quadrivalent” vaccines, such as GlaxoSmithKline’s Fluarix Quadrivalent and Flumist Quadrivalent, a vaccine delivered by nasal spray made by MedImmune, a division of AstraZeneca. Both were approved by the FDA last year.
These quadrivalent vaccines include proteins from four different viral strains, to increase the chance of protection against the flu germs that end up being most prevalent in a given winter. Health authorities see the quadrivalent vaccines as superior, Kartikeyan says.
Amid that competition, Kartikeyan predicts that Protein Science’s vaccine will reach peak sales of $39 million by 2014. After that, she says, “We see them tapering off and disappearing in about 2018.”
Cox, however, says Protein Sciences plans to pursue a quadrivalent form of its vaccine. The company is also interested in making a future version that can be injected under the skin, like Sanofi’s intradermal version of Fluzone, instead of into a muscle, which is more painful and requires a larger needle.
Such further innovations could raise Protein Sciences’ prospects, Kartikeyan says. But clinical trials of those new formulations would take a substantial amount of time. Meanwhile, Novavax of Rockville, MD, (Nasdaq: NVAX) is already in Phase II trials with a recombinant flu vaccine that is also quadrivalent, she says.
Protein Sciences is well positioned to face the coming challenges, Cox says. It made an undisclosed profit on $31 million in revenues last year, and has been building a cash reserve, she says.
The company draws revenues from making proteins for the research projects of other companies. It has received about $70 million so far from its hard-won federal contract from the Biomedical Advanced Research and Development Authority, a division of the U.S. Department of Health and Human Services. The agency recently said it would continue to support Protein Sciences’ development and manufacturing scale-up of Flublok, and its work on Panblok, its vaccine designed to combat a potential influenza pandemic.
The small staff is in growth mode as workers are being added for all these programs, Cox says.