Glaxo Cancer Vaccine Loses Blockbuster Chance After U.s. Delays
Glaxos Cervarix, once touted as more potent than Merck & Co.s rival vaccine Gardasil, has faced regulatory delays in the U.S. Meanwhile, Gardasil sales are waning because the pool of girls who havent been vaccinated is shrinking, an indication that Glaxos chances for a blockbuster product are disappearing.
“Glaxo is too late for the party,” said Ira Loss, an analyst with Washington Analysis in D.C., who has followed the U.S. Food and Drug Administration for more than 30 years.
Cervarix, which protects women against the sexually transmitted human papillomavirus, had the potential to generate annual revenue of as much as $4 billion, according to Jeffrey Holford, an analyst at Jefferies International. He has cut the estimate to $1.2 billion and says even that may be ambitious.
Mercks marketing campaigns for Gardasil, backed with television and print advertisements, have tapped many of the teenage girls who were vaccination candidates, according to company executives. The drugmakers sales of Gardasil plunged 16 percent last quarter to $286 million.
“Glaxo is three to four years late into the market,” Holford said. “They have lost the bulk of the opportunity in the U.S.”
Unlike traditional medicines that get rising revenues for years after regulatory approval as doctors become more comfortable with them, the biggest market for a new vaccine exists soon after its introduced.
Different Vaccines
Glaxo of London first asked the FDA to approve Cervarix in March 2007. The U.S. agency turned down Glaxos request for an accelerated review and said it couldnt clear the product without longer-term data on safety and effectiveness. Neither Glaxo nor the FDA gave details about what regulators asked for.
The product contains a chemical, or adjuvant, designed to boost the patients immune response and make the vaccine more effective. Unlike Merck, which uses a more traditional adjuvant, Glaxo said it used a proprietary one known as AS04, which may have spurred the FDA to ask for longer studies to check its safety, analysts said.
Glaxo last June said it would submit the results of an advanced clinical study, known as HPV-008, to the FDA in the first half of 2009. The company will also refile its FDA application in the first half, Sarah Alspach, a spokeswoman, said in a telephone interview.
Glaxos Troubles
Glaxo needs Cervarix to offset an onslaught of cheaper generic copies that eroded U.S. sales of at least four medicines last year. Profit fell last quarter. Safety concerns dragged down demand for the diabetes drug Avandia, whose sales slid 40 percent last year. The companys stock has dropped 14 percent in the past three months, the fourth-worst performance in a Bloomberg index of 18 European drugmakers.
Vaccine sales are growing by 15 percent to 20 percent a year now at Glaxo, and that will increase “significantly” in the next five years, said Jean Stephenne, president of the companys biologicals division, in a telephone interview. Cervarix is one of about half a dozen new immunizations that will drive the growth, he said.
Gains in Europe
Not all regulators share the FDAs concern about Cervarix. The vaccine is approved in more than 60 countries, including all of Europe, Australia and Singapore. National health programs in the U.K. and the Netherlands have selected the product instead of Gardasil.
“The Dutch and the British tenders were winner takes all, so everybody who gets vaccinated in those countries only get Cervarix,” Chief Executive Officer Andrew Witty told investors at Cowen & Co.s Annual Health Care Conference on March 17. “That demonstrates our willingness to win those tenders and also the strength of the vaccine.”
The products sales grew to 125 million pounds ($181.3 million) in 2008. Gardasil, by contrast, is sold in 109 countries and generated $1.4 billion for Merck last year.
Like Viagra