RIDING THE VACCINE WAVE

THE WORLD OF VACCINE AND DRUG DEVELOPMENT IS BEING RESET. HERE' S HOW INDIAN PHARMA MUST REINVENT TO LEAD THE NEW ERA OF DRUG DISCOVERY AND RESEARCH

Normally, it doesn't make a great business case, especially between two outbreaks,” Vasant Narasimhan, global CEO of Swiss pharmaceutical multinational Novartis AG, said in an exclusive interview to BT in February 2020. He was reacting to why leading global drug discovery firms were least interested in developing vaccines against viral infections such as Covid-19.

At that point, the novel coronavirus infection that would swamp the world in the following months and drag down the global economy on a scale never seen in a century was still a curious virus surfacing in Far East Asia. India barely had three cases of Covid-19 even though the virus had surfaced in Wuhan three months earlier in mid-November 2019. And the World Health Organization ( WHO) was yet to declare the outbreak a pandemic.

Within weeks, though, conventional logic that shunned vaccine development was getting re-written as nationwide lockdowns to check Covid-19 pandemic were costing the global economy $375 billion every month, besides lakhs of deaths and crumbling healthcare infrastructure in large parts of the world. Countries and philanthropies began to pledge unprecedented sums to fund research for vaccines. The WHO Access to Covid-19 Tools Accelerator to fight the disease mobilised over $5 billion, the US set aside $9.5 billion and a European Commission-led initiative announced plans to raise $4 billion.

The biggest- ever hunt for a drug in human history started with over 320 Covid-19 vaccines under development globally. Narasimhan himself became the co- chair of a consortium of leading global life sciences companies to develop and supply vaccines, drugs, diagnostics and treatments for Covid-19. With billions of dollars up for grabs, vaccines are finally making a business case.

With that, India is emerging as the world’s vaccine factory. Nearly 25 per cent of the world’s Covid-19 vaccines will be produced in India. Three of its own vaccines are in advanced stages of development and minimum 16 more are in the works. However, it may be time to think beyond vaccines, as therein lies an opportunity of a lifetime for the country to reverse past setbacks in drug development and leverage the opportunity to script a new chapter in new drug discovery, research and development. These are areas where Indian pharma companies’ past is riddled with failure.

But work on the vaccine provides a window to dust off those failures and start afresh. After all, the world of drug development is being reset through rapid approvals and large scale digitisation. That will alter pharmaceutical development forever. It will also create new geo-pharma equations. “Our vaccine production and logistics capacities are going to benefit all of mankind,” Prime Minister Narendra Modi told heads of Bra

The biggest- ever hunt for a vaccine in human history started with over 320 Covid-19 vaccines under development globally

zil, Russia, China and South Africa at the recent BRICS Summit.

India will need to leverage its newly-formed global relationships and soft power ( Indian vaccines will be supplied to 100-plus countries); new experience of collaborations between research labs, pharma firms and marketers; and all the learnings of accelerated development (efforts are on to cut development time from 10 to 12 years to one to two years without compromising on safety) to emerge as the destination for not just vaccine making but drug development as well.

THE GREAT VACCINE OPPORTUNITY

WHO has estimated that the world will need 3.6 billion doses of Covid-19 vaccine by 2021. That means administering two doses to 20 per cent of the population. However, unlike medicine R& D, where innovative first-in- class, patent protected drug development has always remained the exclusive domain of global pharma MNCs and Indian manufacturers are seen as second tier developing low cost generic versions of those medicines (AIDS drugs is a classic example where foreign pharmaceutical majors invented the drugs, and Indian generics made it affordable to masses) at a much later stage, the race to find a preventive drug for Covid-19 is open to all.

Along with multinationals, and a clutch of India's globally reputed pure play vaccine makers like Serum Institute of India and Bharat Biotech, Indian generic companies have also jumped into the fray. A leading pharmaceutical firm like Zydus Cadila is in a neck- and-neck race with Bharat Biotech in developing an indigenous Covid-19 vaccine. If Serum Institute has readied massive production capacities for global supplies of ‘Covishield’, being developed through a collaboration between Oxford University and UK pharma major AstraZeneca, pharma major Dr Reddys has firmed up a supply agreement for Russia’s Sputnik V. Home grown Aurobindo Pharma is leveraging its acquired asset – US-based Auro Vaccines - to develop a Covid-19 vaccine.

Unlike India’s dismal performance in new chemical entity ( NCE) drug development in the past, India’s pure play vaccine makers have solid credentials as global producers and suppliers, some of which are even first in the world. Bharat Biotech, for instance, has launched the world’s most affordable rotavirus vaccine and the world’s first clinically proven and WHO pre- qualified Typhoid Conjugate Vaccine, besides being the first in the world to file global patents for Chikungunya and Zika virus vaccines. Indian vaccine manufacturers account for about 60 per cent of vaccine supplies to UNICEF. A quarter of Covid-19 vaccine supply to developing world and poor nations is expected to come from India. Serum alone is readying five Covid-19 vaccines. Zydus and Bharat Biotech are working on more vaccines for Covid-19. At least 20 Covid-19 vaccine projects are on from Indian companies. The size of the global vaccine market could double to $93 billion by 2020 due to the Covid-19 pandemic, a Fortune Business Insights report said in August. It estimated a compounded annual growth rate of 10.7 per cent for vaccines between 2019 and 2026, a huge jump from $ 41.61 billion in 2018.

With experts projecting chances of rise in viral infections and need for quick development of newer vaccines and therapies in future, Indian vaccine makers are in a

sweet spot. Indian generic medicine makers are also gearing up. This may not only provide them an additional opportunity to add newer poducts to their portfolio but also help them ride the global goodwill generated as vaccine makers. The changing regulatory systems and protocols, research, production and supply chain partnerships with governments, research institutions and companies globally may help them drive their pharmaceutical business also in a new direction. Will vaccines help Indian generic pharmaceutical industry build their research skills for new chemical entities ( NCEs) too?

Business Of Vaccine

The belief that global pharmaceutical majors are not interested in vaccine business is not entirely true. GSK's vaccine business generated $9.1 billion in 2019; Merck $ 8.4 billion; Pfizer $ 6.5 billion and Sanofi $ 6.2 billion in 2019. But it is a small pie compared to their overall revenues and business opportunities in new pharmaceutical and biotech drugs, the global market for which was $1.25 trillion in 2019.

In fact, globally, about 80 per cent of vaccine sales by value are from five large multinationals which make new, advanced vaccines. Pfizer’s Prevnar vaccine for protection from meningitis and pneumonia had sales of $5.95 billion in 2019. Merck’s Gardasil against human papillomavirus, which causes cervical cancer, had sales of over $3 billion last year. Sanofi’s influenza vaccines, Fluzone and Flublock, had sales of €1.9 billion in 2019. Influenza vaccines are among the most sought after in the west,

mostly cold countries. Their market was worth $3.96 billion in 2018 and is projected to reach $ 6.2 billion by 2026, says an Allied Market Research report.

However, such vaccines account for only 20 per cent of doses sold globally, estimates WHO. In other words, while multinationals have been present in the high value vaccine business, they are not into vaccines that are used for large scale immunisation programmes largely dependent on public purchasers and donor policies. Agencies like WHO, Unicef, Pan American Health Organization, GAVI ( Vaccine Alliance funded by Bill and Melinda Gates Foundation), etc, purchase such vaccines through pooled procurement mechanism at reduced prices. This is where Indian manufacturers have thrived. The Indian imprint on viral, bacterial and combination vaccines like MMR ( Measles, Mumps and Rubella), Hepatitis B, Oral Polio Vaccine, Pertussis (a whooping cough), Diphtheria and Tetanus and Bacillus Calmette Guerin is quite strong. More than two-third vaccines ( by volume) manufactured in India are exported. WHO says global demand for the vaccines they address was 3.5 billion doses, valued at $26 billion, in 2018 (excluding vaccines used for oral polio, seasonal influenza, travel and military markets). That was 25 per cent higher than a year ago, indicating a source of strong revenue flow for Indian players.

The advantage for Indian firms is that not all these diseases are of interest to global biggies. “Right now, typhoid is a pandemic in Pakistan. Children are dying in Karachi because they’re not responding to antibiotics (resistance), including ciprofloxacin. Gates Foundation has funded Pakistan to vaccinate its 20 million children. I am the only one with a typhoid conjugate vaccine, and we are supplying it to Pakistan,” says Krishna Ella, Chairman and Managing Director of Bharat Biotech.

What Ella is hinting at is that for an illness that affects the developing world, Indian companies tend to have a higher interest than global firms. An industry veteran, who headed a multinational pharma company in India, agrees. "It is a fact. Most multinational vaccines address only health