With US approval of the first recombinant influenza vaccine, Flublok, three questions immediately arise: Why has nobody purchased its developer, Protein Sciences? Will the company be taken out, and if so, for how much? And if an independent course can be navigated by the privately held Connecticut group, what will it take to bring the vaccine to market?
Product deals or acquisitions take place so often in phase II or III, where the greatest value can be extracted, that it is surprising that a technology which can shorten the manufacturing cycle would remain unpartnered in the world’s largest drug market and its developer stay in private hands. The company has been fortunate in snaring more than $80m in non-dilutive US biosecurity funding as well as strategic big pharma investment. Nonetheless, word of strategic developments would build greater faith in the commercial promise of the vaccine.
Flublok is manufactured using a technology that re-engineers baculovirus in insect cells to generate a recombinant hemagglutinin, which is then used to produce the trivalent vaccine. The FDA approved Flublok for patients aged 18-49, with approval for older patients sought later in the year. The company reckons it will be able to manufacture 150,000 doses for the current season, which could at least allow those patients with an egg allergy to receive some biological protection from a flu that has stricken the northern hemisphere.
Executive chairman Daniel Adams told EP Vantage that the company should be able to manufacture 3-5 million doses in the next flu season thanks to the lease of a former Pfizer manufacturing site in New York state, and as many as 7.5 million the 2014-15 season.
The vaccine will be priced at a premium to traditional shots, he said, although the company is counting on a marketing message that will attract those consumers who are resistant to inoculation because of fears of becoming infected with a live virus or because of perceived risks of preservatives and adjuvants.
Mr Adams says he believes the problem is particularly acute in the population in which it has just received approval. “That’s a very large untapped market that we believe we can address,” he said. “We’re talking to some very large buyers … and having success in convincing them that they ought to be carrying us.”
He stopped short of committing to a traditional big media direct-to-consumer campaign, however.
As a small private firm, Protein Sciences will be taking on a big challenge in a commodity world where Sanofi and other big pharma groups dominate. Protein Sciences is profitable thanks to federal grants and has a services business in development of therapeutic and prophylactic vaccines, Mr Adams said, so he believes that it can fund manufacturing, sales and marketing for its current plan. It also has licensed Japanese rights to Astellas Pharma.
The fact that a technology sufficient to achieve FDA approval has not been licensed earlier or bought outright is a bit of a mystery, however. Mr Adams chalks this up to an internal desire to ensure the technology would not be lost in the world of big pharma.
The company’s investors fought off a hostile bid by Emergent BioSciences in 2008. At the time, the Maryland group’s offer had valued Protein Sciences at $78m, an offer that included $30m in earnout payments.
When that battle had concluded, Mr Adams said Flublok was so close to approval that other potential partners were reluctant to commit until the FDA had given its sanction. Thus, if there is interest in licensing or acquisition, it is fair to assume that it will come reasonably quickly, and presumably at a higher price than the $78m Emergent offer.
It should be noted that among Protein Sciences' investors are Johnson & Johnson and Pfizer, by way of Wyeth; both have significant vaccine interest and thus should be familiar with the technology. Parntering or acquisitions are options for the technology in the future, as well as seeking a market listing, Mr Adams said.
It is hard to envision the current business plan lasting long in the current market landscape, but there are always exceptions to the rule. Protein Sciences appears to have developed a better mousetrap – if a path is beaten to its door, it will probably be partners or buyers, not consumers.