EuroBusiness Media (EBM): Sanofi-aventis, one of the world’s largest diversified healthcare companies, is holding an Investor Relations Thematic Day on the subject of vaccines. Wayne Pisano, welcome.
Wayne Pisano (WP): Thank you, glad to be here.
EBM: You are the Senior Vice President of Vaccines of sanofi-aventis and you’re also the CEO of Sanofi Pasteur, sanofi-aventis’s unit specialized in vaccines. Before we begin, perhaps you could tell us just a few words to present the vaccines business in general.
WP: The vaccines business is rather an exciting business today. Vaccines are a little different than pharmaceuticals in that we’re looking to prevent disease as opposed to treating a disease. And I think governments and healthcare providers today are recognizing that prevention is a very good healthcare investment. It’s interesting because at a moment in time we are seeing lot of innovation occurring in the vaccine industry, for example, we have licensed and developed a vaccine for bacterial meningitis, Menactra. We are also seeing vaccines in development for diseases, such as Dengue, Clostridium difficile, and actually new and improved vaccines. Additionally, we’re seeing a change in how vaccines are valued, so we’re seeing improved pricing as people start doing the health economics and recognizing the real value of vaccines. So it’s a very exciting and growing health part of the business.
EBM: Could you, in a few words, give us some details about the profile of Sanofi Pasteur, its global ranking, some of the areas of therapeutic focus?
WP: Sanofi Pasteur is the vaccine division of sanofi-aventis, and we are the leading vaccine manufacturer in the world. We produce vaccines today that prevent over 20 different diseases. We are the leading manufacturer for influenza, pediatric vaccines, which are for polio, pertussis and HIB (Haemophilus influenzae Type B), bacterial meningitis, which I mentioned with Menactra, and also travel endemic vaccines.We have today a world class manufacturing capacity, and this is a very important part of the vaccine business – the ability to produce the vaccines. We’re dealing with live virus and live bacteria. And to have the facilities that meet the GMP (Good Manufacturing Practice) requirements of the various regulatory authorities is a big challenge, and to have the capacity to meet the world need. The opportunity is significant, not just in the developed world, but also in what we call the South, which would be the countries outside of North America and Western Europe. You have very large populations who don’t have access to vaccines today, and we are building facilities all around the world to basically meet this growing need. In fact, we have probably today over 15 major capital projects under development. We are building new flu facilities in Ocoyoacac Mexico, Shenzen in China. We have a new Dengue manufacturing facility being built in Neuville in France. In our site in Marcy, we have a new Haemophilus influenza Type B facility that will allow us to reach 200 million doses. We are expanding our polio capacity in Marcy to 300 million doses. We have new filling and packaging facilities, which are important, both in Val de Reuil and in the US. And we just recently brought a new flu facility on line in the US this past year.
EBM: What is your outlook for the growth of your vaccine business?
WP: When we look at our vaccine business over the next five years, we basically see our business doubling in size, and for a number of reasons. There is still growth opportunity in Western Europe and North America in terms of increasing immunization. An example of that would be influenza. Today, in countries like France and the US, we immunize 30% of the population. Another way to look at that is – we don’t immunize 70% of the population. And then, as we look to outside of the developed countries, this tremendous need both from the fact that there are large populations that are not immunized – so there’s an opportunity to expand immunization with existing products – plus there are many diseases where there are not vaccines today in this part of the world, and a good example of that would be Dengue.
EBM: Influenza, and in particular the H1N1 flu, is a hot topic this year, obviously. What can you tell us about the H1N1 epidemic and your H1N1 vaccine?
WP: H1N1 is a global pandemic and, as the largest influenza vaccine manufacturer, our responsibility is to produce as much vaccine, as fast as possible, to the highest quality standards, so we are producing an effective and safe vaccine. Our basic business though is producing seasonal influenza vaccines. This is a business that is sustainable, it repeats year after year, and long after this pandemic is resolved, the seasonal vaccine business will still be there.
EBM: What are your comments on some recent reports about H1N1 vaccine shortages that have spurred some doubt as to whether the current manufacturing process for vaccines may be outdated?
WP: Well, I think some of the reports are not absolutely accurate. First of all, we are producing well over 250 million doses of the H1N1 vaccine, and this is a product that we will be delivering through the early first half of 2010. So, our manufacturing process is able to produce very large quantities of vaccine in a very short period of time. We manufacture our influenza vaccine both in the US and in France using eggs as the basic growth medium for the virus. We have looked at many different technologies and there are organizations that would suggest that cell culture is really the new and innovative way to go. We are actually quite familiar with the cell culture approach; we produce our polio vaccine and our rabies vaccine on cell culture and have done that for more than a decade. Based on our experience, we have found that the influenza virus vaccine manufacturing is most effective on eggs. We are able to produce very large quantities at very reasonable pricing. And we are constantly looking for new technologies and new products. We haven’t found anything that is better than eggs at this point in time. However, we are looking at some products in our pipeline that are very exciting, that may actually benefit the world in the future. For example, we are working on a new vaccine. It’s called the universal influenza A vaccine. And this candidate – if we’re successful – would allow us to produce a vaccine that would be effective against all A strains. It would be used in conjunction with the seasonal influenza vaccine, but the advantage of this would be that we would be able to produce this in advance and have stock piles for when the next pandemic occurs.
EBM: What is your update today about the seasonal influenza vaccine?
WP: First of all, we have met all of our commitments not only on H1N1, we’ve also met all of our commitments on the seasonal flu vaccine. This was a rather interesting year for the influenza vaccine manufacturers because one of the strains selected by the World Health Organization (WHO) was a low-yielding B strain. Because we have three manufacturing facilities – two in the US and one in France – we have the capacity and also the skilled workforce, so that we were able to produce and deliver all the vaccine that we committed to. This is our base business. We have been producing seasonal influenza vaccine for over 40 years, and we have two of the most experienced teams in the world, one in Val de Rueil and one in the US.
EBM: How confident are you in the future growth of your Menactra meningitis vaccine, given the forthcoming competition in this area, and why do you think your approach is better?
WP: Well, when you look at Menactra, first of all, it was the first quadrivalent conjugate vaccine licensed in the world. This is a vaccine that is effective against 4 serotypes of bacterial meningitis. And in fact, when you look at the disease itself, you see that the cause of the disease can be different serotypes. The serotypes may shift over time, and what’s prevalent in one part of the world may be different from what is prevalent in another part of the world. So, the best approach is to have a vaccine that addresses as many serotypes as possible, and that’s exactly what our Menactra vaccine does. Additionally, we are developing this vaccine as a two-dose product for infants and toddlers. And this is an important development for babies because many times children require three or four doses of vaccine. So you have extra shots or jabs, and you additionally have the cost of a four-dose product. The two-dose product is going to be cost effective and reduce the number of shots. And then, globally, we are going to be licensing Menactra in many markets. We recently licensed the product and launched it in Saudi Arabia and in Canada. We will be licensing it throughout Latin America and Asia Pacific over the next several years.
EBM: Emerging markets adopt vaccines at the early stages of increasing healthcare spend. What impact will the higher volumes but lower prices of emerging markets have on the margins of your vaccine business?
WP: That’s a very interesting question, and many people would expect that lower prices would equate to lower profit. And while that’s directionally correct, it’s not as significant as most people would think. The reason is that yes, it’s a lower price; however, in emerging markets, the governments are the major purchaser of the vaccine. These are public markets, so it’s like a tender process, and there’s no marketing and selling expense that is linked to that business, or very little. And therefore the margins are still reasonable. One of the things that we’ve been doing, actually two things we’ve been doing: one is that we partner with local manufacturers, which basically allows us to produce the antigen in France and in North America and have the packaging and filling done with the local partner. So, in Mexico we work with Birmex, in Brazil with Butantan, Chumakov in Russia, Biovac in South Africa, GPO in Thailand, and on and on. And so that’s a way of helping get the cost down. Additionally, we have recently acquired Shantha Biotechnics, which is the premier Indian manufacturer of vaccines. And Shantha is an organization that will allow us to produce vaccines at very reasonable pricing that’s basically targeted for these populations.
EBM: Continuing on emerging markets and the acquisition of Shantha, which you just mentioned, you recently acquired Shantha in India, could you just give us an update today on the expected fall-out from this acquisition, how the integration is going so far, and remind us of the rationale for this acquisition?
WP: Your question is about the integration. That’s an interesting question because our intention is not to integrate Shantha. Shantha will remain a stand-alone division of sanofi-aventis, and this is being done for a very good reason. We want to capture the entrepreneurial style of this company, the speed at which they are able to develop and license vaccines. Shantha today has four products that are WHO prequalified, they have an interesting pipeline of products – rotavirus, HPV – and their portfolio of products and their pipeline are very complementary to Sanofi Pasteur’s. There is virtually no overlap. Their pentavalent vaccine Shan 5, is a good addition to our portfolio of products. We don’t have a whole-cell pentavalent in our portfolio, and this is a product that serves Unicef and WHO market, so it allows us to bring our expertise to enhance Shantha. But it’s complementary.
EBM: Wayne Pisano, Senior Vice President of Vaccines at sanofi-aventis and CEO of Sanofi Pasteur, thank you very much indeed.
WP: Thank you Adrian, it’s my pleasure.
