Meet the New ‘Gold Standard’ for Flu Vaccines

by James Brumley | September 24, 2013 8:45 am

The flu vaccine trade might be an annual cliche trade, but things become cliche for a reason. Then again, nothing lasts forever.

Flu-season stock pick ’em tends to stir the pot heading into the cold-weather part of the year. Companies like Novartis AG (NVS[1]), Sanofi SA (SNY[2]) and Roche (RHHBY[3]) are thrust into the limelight during this period, with investors fishing for a revenue bump thanks to flu vaccines.

Incredibly enough, however, there’s not a consistent influenza treatment revenue leader. The world’s healthcare overseers often decide which flu strains are going to be most problematic for that upcoming flu season, which in turn means certain flu drugs fall in and out of favor from one year to the next.

However, if a team of scientists at London’s Imperial College manages to do what it intends to do, the world’s annual flu vaccine race might be cancelled in just a few years.

A New Vaccine Paradigm

Most influenza vaccines are designed to induce an antibody-producing immune response. It can be an effective approach, too, though it isn’t always on the mark.

How so? Most flu vaccines take aim at one particular protein found on the outside of a virus. Problem: Those proteins are forever-changing, making older vaccines less and less effective as time goes on. And, with a variety of flu strains in play at any given time, healthcare providers are forever chasing the problem rather than proactively stopping it in its tracks.

A team of researchers at Imperial College believes it’s on track to circumvent the problem of a constantly moving influenza target by going straight to the core: the core of flu viruses.

As it turns out, although the exterior proteins of a flu virus are forever changing, the proteins inside a flu virus not only don’t change much, but the same basic proteins are present in most flu strains. If a vaccine could create an immune response to those proteins and kill the virus that way, the annual pairing of the right flu treatment to that year’s most prevailing strain would be a moot exercise — one vaccine would treat all strains, and likely be effective for a long time.

What’s at Stake

Flu vaccine manufacturers like GlaxoSmithKline (GSK[4]), AstraZeneca (AZN[5]), Roche, Novartis and Sanofi SA don’t need to ring the alarm bells just yet. The U.K. team doesn’t see its work becoming a full-blown pharmacological solution for at least five years. On the other hand, all the major drugmakers might want to keep this research on the radar, because eventually it will take aim at part of their revenue stream.

It’s not chump change, either. Some estimates suggest the flu vaccine market size at around $7 billion per year.

Most of that business belongs to Sanofi’s Fluzone, which drove more than $1.2 billion in revenue last year. Since then, SNY has developed a short-needle patch as well as a Fluzone version that vaccinates against four different flu strains, making it considerably more potent than the currently more-typical three-strain vaccine options.

In the Meantime

While Sanofi might have a top entry in this year’s flu vaccine race with its four-pronged vaccine — called a quadrivalent — it’s not the only player with such a vaccine on the table. GlaxoSmithKline also has a flu drug being shipped right now that can stave off four different strains of flu. In fact, Glaxo has two such vaccines … FluLaval, and Fluarix. FluLaval was last year’s second-best flu vaccine, racking up $375 million in revenue, and that was before it was a quadruple threat.

Nasal spray flu vaccine FluMist from AstraZeneca also is a quadrivalent ready to go for 2013.

The difference between a three-strain and a four-train influenza drug might seem immaterial; after all, how many different flus is a person actually going to be exposed to during any given year?

Still, don’t dismiss the importance (even if only perceived) of that additional layer of defense. The World Health Organization is wrong about half the time regarding which strain will be a particular flu season’s most pervasive form of the disease, and it’s not uncommon for an individual to not have the right inoculation for that year’s flu season.

By improving the typical vaccine’s efficacy by 33%, the benefit of being vaccinated at all makes a big leap forward. It’s still not as potent as the promise of the universal flu vaccine being developed in the U.K. right now, but quadrivalents are going to be the industry standard for at least a few more years.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

  1. NVS:
  2. SNY:
  3. RHHBY:
  4. GSK:
  5. AZN:

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