Vaccines Seen a $10 Billion Market by '06
Jan. 7, 2003

- LONDON (Reuters) - Sales of vaccines, once considered a commodity market,
are booming with global revenues set to reach nearly $10 billion in 2006
from $5.4 billion in 2001, according to research published on Tuesday.

Analysts at Merrill Lynch said the fastest growing section of the market
would be for flu vaccines, sales of which are expected to more than double
to $2 billion in the next five years.

Much of the flu vaccine market's 16 percent compound five-year growth will
be driven by the entry of MedImmune Inc.'s premium priced nasal spray
FluMist, which will be co-marketed by Wyeth.

The launch of FluMist later this year, coupled with increasing demand for
pediatric jabs, could see the overall vaccine market leap by 20 percent in
2003 alone. Growth is then expected to moderate to an annual 10 percent from
2004 to 2006.

Merrill's projection of 13 percent compound five-year sales growth for the
total vaccine market compares with global drug sales of just eight percent
in the year to October, 2002, according to healthcare information firm IMS

The infant sector currently makes up the largest section of the vaccine
market, with 2001 sales of $2.5 billion, but adult demand is growing as
governments actively promote flu shots for the elderly and more vaccines are
used by tourists.

At the same time, the threat of bioterrorism in the wake of September 11,
2001 attacks on the United States has spawned a new business in supplying
vaccines against smallpox following fears that the deadly virus might be
used as a weapon.

The global vaccines market is currently dominated by four large
pharmaceutical companies -- Aventis SA, GlaxoSmithKline Plc, Wyeth and Merck
& Co Inc -- which together account for almost 85 percent of sales.

But a number of smaller companies are also carving out a niche, including
Britain's PowderJect Pharmaceuticals Plc and Acambis Plc, Switzerland's
Berna Biotech and Chiron Corp of the U.S.

Merrill said it had initiated coverage of PowderJect with a "buy"
recommendation, reflecting its strength in flu and travel vaccines, while
Berna Biotech was started as "neutral."

Acambis, however, was rated a "sell." The brokerage predicted it would
revert to making a loss in 2005, after a period of profitability on the back
of U.S. government contracts for smallpox vaccine.

Copyright 2003 Reuters News Service.