Breaking the Big 4: How Takeda is taking on vaccines

While vaccines will continue to be dominated by GSK, Merck, Pfizer, and Sanofi, manufacturing and collaborations can help to unblock this consolidated industry says recent entrant Takeda.

Rahul Singhyi, COO of Takeda vaccines, told delegates at the BPI West event in Santa Clara, California that vaccines used to be viewed as “the backwaters of the pharma industry, largely considered part of corporate social responsibility,” but that has changed over the past 20 years due to innovations and approvals in disease areas ranging from Human Papilloma Virus (HPV) to dengue.

However, the vaccine space still suffers from numerous challenges. Often emerging infectious diseases are preventable by new vaccines, but economic forces mean money is not thrown at a vaccine until an outbreak occurs, making speed of development an issue.

Image: iStock/tupungato

Secondly, Singhyi said, while industry is getting better, financial pressures make access to vaccines difficult for the poorest and most vulnerable populations.

Meanwhile, industry continues to run into forecasting and supply issues. GSK, for example, has been struggling to keep up with demand for its shingles vaccine Shingrix.

All these issues relate to the manufacturing of these problems. The nature of vaccines means hundreds of millions of doses need to be produced often very quickly at a very low cost per unit, while simultaneously juggling extremely complicated supply chains and ensuring very high quality – especially as these are preventative rather than curative products.

“Manufacturing is the key lever to unlock the potential of vaccines, because if you can fix this then access, affordability issues would be addressed, the speed issues would be addressed, and that could help us with emergencies,” Singhyi said.

Oligopoly and investment issues

More so than any other life science area, vaccines also struggle from the inflexible structure within the industry.

According to an EvaluatePharma report​, the vaccine market is controlled by just four companies: GSK, Sanofi, Merck & Co. and Pfizer. As the graph – pictured below, care of Statista – shows, the ‘big four’ generated over 86% of total vaccine revenue in 2015 and will continue to dominate the field in the next few years.

It is a very difficult market to enter, Singhyi said, especially if one is constrained for capital. “Getting there is hard and for small companies it’s just too long sometimes,” he said, adding the journey can take years and hundreds of millions of dollars of investment.

Vaccine market 2017 and 2024. Image c/o Evaluate/Statista

Moreover, without a big company in support financially, anyone trying to develop vaccines will be unlikely to gain investment from the usual place as a product, and thus the return on investment, takes so long to arrive, he said.

Innovation & collaboration

There are a few new entrants in the space, not least Takeda, which only launched its global vaccine business division in January 2012. Janssen too is taking on the status quo, but like Takeda has a large pharma and biopharma portfolio supporting it.

For Takeda to “navigate the vaccine landscape and make an impact,” Singhyi said forging global collaborations were key.

“It is way too complex to do everything ourselves, and therefore we work with others to reduce capital, complexity and development costs.”

One example he used was Takeda’s deal with BARDA in 2016 to develop a Zika vaccine.

“Our innovation played a role, but it was a two-way street. We said we could not fund this as we didn’t know what the demand for Zika was going to be,” he said. “But it’s important as if it happens it can be a timebomb.”

Therefore, the firm received $312 million in funding form the US government to bring its expertise, production facilities, scientists and people to the project. “With the two of us working together, we addressed the risks in such a way it created a win-win situation for everybody.”

Investment in innovation has also helped Takeda grow in the vaccine space, especially through licensing and acquisition.

“We remain extremely open to new technologies,” he said. “We’re like Apple, we don’t develop and discover everything within our company. We find things, combine them, grow them up. Where the innovation is is in the business solution.”

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