Merck report: $358m in Gardasil sales for Q2; $1 billion total for vaccines

While we don't typically highlight corporate earnings reports or similar news, the quarterly report released Monday by Merck for April-June 2007 provides some new information about the growing market for vaccines, and, in particular, Gardasil. Here's coverage from yesterday's New York Times, "Another Quarter of Strong Results by Merck," and a similar story from Reuters.

Since this news comes directly from the company, the Merck press release is particularly useful. Here's part of what it says about vaccines:

"Total vaccine sales, as recorded by Merck, were $1.0 billion for the quarter, compared to $349 million in the second quarter of 2006. The growth in vaccine sales was led by the performance of GARDASIL along with strong contributions from ROTATEQ and other pediatric vaccines. Vaccines in most major European markets are sold through the Company’s joint venture, Sanofi Pasteur MSD, and the results from its interest in the joint venture are recorded in equity income from affiliates.

Total sales as recorded by Merck for GARDASIL, the Company's cervical cancer vaccine, were $358 million for the second quarter. As of the second quarter, GARDASIL has been approved in 80 countries, many under fast-track or expedited review; and launched in 59 of those countries. The vaccine remains under review in approximately 40 other countries.

ROTATEQ, Merck's vaccine to help protect children against rotavirus gastroenteritis, achieved worldwide sales, as recorded by Merck, of $119 million for the quarter. As of the second quarter, ROTATEQ has been approved in 61 countries and it has launched in 22 of those countries."

The release goes on to note sales figures for Proquad ($89 million), Varivax ($147 million), and Zostavax ($47 million).

A companion document released by Merck breaks down sales between the U.S. market and internationally. Nearly 80% of Gardasil sales were in the U.S. ($286 million), as were an amazing 96% of RotaTeq sales ($114 million). There's little doubt from these data that the U.S. is leading the way in the uptake of these two fairly new vaccines, despite the far greater need for cervical cancer and rotavirus prevention internationally.

Overall, $1 billion in vaccine sales for a single company in a three-month period is perhaps the best evidence to date of the potential profitability of vaccines to an extent not previously seen. As for Gardasil, it is difficult to work backwards from the sales figures given ($358m) to ascertain the number of doses sold during the April-June period, since governments and insurance companies pay less than the well-known $120/dose 'sticker price'. This CDC price list shows a cost of $96.75/dose for Gardasil as part of the Vaccines for Children program. Using those figures as endpoints, a very rough estimate would suggest 3-4 million doses were sold, or enough doses to fully vaccinate slightly more than 1 million girls.

Given the size of the population for whom vaccination is recommended (all females 11-26), the potential growth of the Gardasil market is staggering, perhaps explaining, in part, the company's apparent enthusiasm to promote its vaccine in advance of the arrival of GSK's Cervarix.

From Vaccine: Examining vaccines' economic value

A noteworthy paper in the issue of Vaccine dated August 10 examines assessments of costs and benefits for vaccines and vaccination programs. Titled "Do we fully understand the economic value of vaccines?" (free abstract), the implied answer is fairly obvious (or there'd be little need for another paper on the topic).

Anyone who has attended a meeting of the ACIP has seen firsthand the growing attention given to cost-effectiveness studies of a new vaccine prior to a decision on recommending its use. This paper, by Drummond and colleagues, examines cost-effectiveness data for several widely used vaccines and compares policies among developed-world countries for these vaccines. Among its conclusions:

• "The vast majority of vaccine strategies are cost-effective, when compared with accepted thresholds of cost-effectiveness."
• "Standard methods of economic evaluation...may underestimate the true economic value of preventive strategies such as vaccination."
• "Current vaccination policies in developed countries are generally in line with the existing evidence on cost-effectiveness, although they often lag behind."
  

An excellent paper addressing an issue of growing importance to vaccine policy in a time when vaccine prices are reaching new highs.

Hitting the bull's eye for pandemic flu vaccine development

In this month's Lancet Infectious Diseases, a commentary by Sambhara, Bridges, and Poland offers an update on progress toward pandemic influenza vaccine development in the wake of the licensure of Sanofi Pasteur's pre-pandemic vaccine this spring.

The title of the short commentary sums up the authors' assessment: "H5N1 vaccine hits the target, but not the bull's eye." (free abstract). Complementing this metaphor is a graphic which illustrates the specific areas that need to be addressed to produce the "ideal pre-pandemic vaccine." Such a vaccine would be safe (of course), require a single dose with a small amount of antigen, provide long-lasting immunity, and be stable (i.e., capable of remaining potent even if stored for some time).

Given that the Sanofi Pasteur vaccine licensed in April falls far short of these goals, the authors advocate directing research efforts toward these aims in particular.

Speaking of pandemic influenza research, WHO posted on their website late last week a series of tables summarizing the impressive number of vaccine candidates for which clinical trials are underway. As the tables show, while H5N1 is properly commanding the overwhelming majority of attention of late, it is not the only influenza strain with pandemic potential that has attracted the interest of researchers.

With respect to pandemic planning in the U.S., another update was issued late last week by HHS secretary Michael Leavitt. Here's the full report as well as coverage from CIDRAP News. In a brief section on vaccines, the report states that the current pre-pandemic stockpile includes sufficient doses for 6 million people, with a 5-year goal of building enough capacity to produce vaccine for all Americans within six months of 'the' pandemic virus' first appearance.

Sanofi flu vaccine plant opens, doubling capacity

The front page of Friday's Philadelphia Inquirer featured a photo of a gloved hand inspecting a tray of eggs. The news? The completion of Sanofi-Pasteur's new flu vaccine plant in Swiftwater, PA.

Some of the numbers in the story: Construction cost $150 million; at full capacity, 600,000 eggs will be used daily, and the plant will double Sanofi's current flu vaccine capacity from 50 to 100 million doses annually.

As the millions of unused doses of seasonal flu vaccine last winter demonstrated, ensuring adequate supply is not a major issue for seasonal flu vaccination efforts. (The far greater challenge is increasing demand among the many populations in which annual vaccination is recommended).

However, Sanofi's new Swiftwater plant could also be used for avian flu vaccine production. (In fact, the Inquirer headline blared, "New Pa. vaccine plant poised for pandemics.") Not only would there be an immediate need for far greater capacity in a pandemic, but the possibility of multiple doses required to provide adequate immune protection could effectively cut avian flu vaccine supply by 1/2 or 1/3, depending on whether 2 or 3 doses are needed.

To that end, Sanofi is in the process of retrofitting an adjacent facility (courtesy of a $77 million federal grant) to increase capacity even further, to 150 million doses, by 2010.

By the way, while the news last week was that construction of the Swiftwater facility was complete, FDA approval is needed before operations can begin. Opening is not expected until late 2008.

Research shows potential of edible vaccines

A potentially promising new strategy for vaccine delivery was highlighted in last week's edition of the Proceedings of the National Academy of Sciences (PNAS). In a paper by Nochi and colleagues, "Rice-based mucosal vaccine as a global strategy for cold-chain- and needle-free vaccination," (free abstract), the authors report on favorable immune responses in mice caused by rice genetically-engineered include a vaccine against cholera.

An editorial in the same issue of PNAS ("Vaccines are for dinner,") expresses great optimism about the potential for the Nochi, et al., method to address many of the logistical obstacles that hamper large-scale vaccination efforts, particularly the need to keep traditional vaccines refrigerated at all times from manufacture to delivery (known as the 'cold chain') and the difficulties of needle-based vaccination programs around the world.

Last week's issue of The Economist picked up the story -- "A new health food" -- providing a far more accessible summary of Nochi, et al.'s research for a lay audience.

It is an interesting and potentially important set of research findings, but as with most early-stage research, the journey to a viable human therapy employing rice-based vaccines is, at best, a decade or longer away.

MMWR: Flu recommendations and polio eradication update

Several interesting items related to vaccination appear in today's issue of MMWR. Among them:

-- A revision to the ACIP document "Prevention and Control of Influenza," an expansive review of all aspects of seasonal flu vaccination guidance and related data. Notable in this updated version is additional encouragement aimed at promoting influenza vaccination of health care workers as well as information on the composition of the 2007-08 vaccine.

-- A report on worldwide progress toward polio eradication, as of May 2007. The number of polio-endemic countries remains at four (Pakistan, Afghanistan, Nigeria, and India) with the vast majority of the 1,997 cases reported in 2006 occurring in Nigeria (1,123) and India (676). Global vaccination coverage stands at 78%, a number that is well over 90% in the Americas but far lower in Nigeria (39%) and India (58%). Those interested in polio eradication should visit our previous posts about polio, which include several items discussing the merits and challenges associated with pursuing eradication.

From Pediatrics: GSK rotavirus trials; trial of school-based flu vaccine program

In a slow midsummer period for vaccine news, two papers appearing in the journal Pediatrics this month deserve mention:

• "Dose Response and Efficacy of a Live, Attenuated Human Rotavirus Vaccine in Mexican Infants" -- This is a report on a trial of GSK's rotavirus vaccine, Rotarix. The study of 405 infants showed the vaccine to be safe and effective. Rotarix is still awaiting U.S. licensure -- the application was filed late last month, according to this announcement -- but it is already available around the world (including the EU, as this 2006 press release announced). With Merck's rotavirus vaccine, RotaTeq, available in the U.S. since 2006, another Merck-GSK head-to-head showdown is bound to occur, albeit one certain to be far less noticeable than the imminent competition for the HPV vaccine market likely to begin in 2008.

• "Mass Distribution of Free, Intranasally Administered Influenza Vaccine in a Public School System" -- The paper reports on a school-based influenza vaccination program in the Knoxville, TN area. Roughly 24,000 of 53,000 students received the FluMist vaccine, an encouraging number according to the study's authors. Of concern, however, was the amount of resources (notably, 6900 person-hours of labor) needed to execute the program. The program described here was funded in part by MedImmune (since purchased by AstraZeneca), the manufacturer of FluMist. Nevertheless, the paper's authors are correct to note the value of trials such as this in evaluating the feasibility of school-based programs to increase pediatric vaccination rates or as part of pandemic response efforts.
  

Upcoming event: CHOP vaccine education symposium in September

Our colleagues at the Children's Hospital of Philadelphia Vaccine Education Center are planning a one-day symposium this September on the latest in vaccine science and policy, with, we suspect, some ethics sprinkled in -- particularly on the topic of vaccine exemptions. An impressive roster of speakers and attendees is expected.

More information is available here, and continuing education credit is available.

JAMA and Slate on vaccine-related replacement disease

A common question asked about vaccines that target specific variants of a pathogen (such as HPV, pneumococcus, or meningococcus) is how great the likelihood is that 'replacement disease' may occur. Simply stated, this phenomenon describes the emergence of new serotypes or subtypes not included in a vaccine becoming more prevalent as those that are included in the vaccine are eliminated.

A paper in JAMA this spring suggested replacement disease may be occurring among recipients of Prevnar, Wyeth's pneumococcal conjugate vaccine. (Four doses of the vaccine are recommended for all U.S. infants.) The paper was the basis for a commentary by Arthur Allen ("Fear of Replacement: What if a vaccine kills off one strain of a disease—but makes room for another?") that appeared in Slate late last month.

Ben Kleifgen, working at the Penn Center for Bioethics this summer, summarizes both items:

"In the JAMA paper, CDC’s Arctic Investigations Program observed an increase in pneumococcal infections in Native Alaskans receiving Prevnar. Of particular concern to researchers is the fact that the infections are largely from serotype 19A, a highly virulent but previously quite rare strain. Allen wonders if the threat of replacement disease may discourage further vaccine development, although the situation may not be that bleak. There is evidence that the new strain may be on the rise worldwide, unrelated to the use of Prevnar. In addition, Wyeth and GSK are both working on new pneumococcal vaccines that will cover 19A."