Coronavirus highlights the $35 billion vaccine market. Here are the key players

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on pinterest
Pinterest
Share on whatsapp
WhatsApp
Share on telegram
Telegram

By Yun Li

The coronavirus outbreak is bringing attention to the fast-growing vaccine industry.

The vaccine market has grown sixfold over the past two decades, worth more than $35 billion today, according to AB Bernstein. The firm said the industry has consolidated to four big players that account for about 85% of the market — British drugmaker GlaxoSmithKline, French pharmaceutical company Sanofi, and U.S.-based Merck and Pfizer.

“For every dollar invested in vaccination in the world’s 94 lowest-income countries, the net return is $44. Hard to argue against,” Wimal Kapadia, Bernstein’s analyst, said in a note. “This oligopoly has been built through significant market consolidation driven primarily by the complexities of the manufacturing and supply chain.”

These companies have jumped into the race to combat the deadly coronavirus, working on vaccine or drug programs. Investors have been flocking to some biotech names amid market volatility in hopes that their initiatives to develop treatment and prevention for the coronavirus could come to fruition at some point.

Sanofi is teaming up with the U.S. government to develop a vaccine for the new virus, hoping its work on the 2003 SARS outbreak could speed up the process. GlaxoSmithKline said this month it is partnering with the Coalition for Epidemic Preparedness Innovations for a vaccine program.

Still, any commercial treatment for the coronavirus could be years away. Experts have warned despite recent advances, the public shouldn’t expect a coronavirus vaccine to hit the market until early next year.

The Bernstein analyst said Sanofi and GlaxoSmithKline both have a stable vaccine portfolio, including shingles, flu, pertussis and polio vaccines, that will keep driving revenue.

‘Long-lived assets’

Merck’s vaccine business generated $8.4 billion of revenues in 2019, the segment has been growing at an annual rate of 9% since 2010, according to Bernstein.

Its human papillomavirus vaccine Gardasil 9 will be “the biggest selling vaccine of all time,” Kapadia said. “Gardasil 9 will take over the HPV market given competition is limited – supply is the only decelerator.”

For Pfizer, while its vaccine business has stagnated in recent years, its pipeline has “blockbuster potential,” the analyst noted.

“Vaccines are long-lived assets, have high barriers to entry, typically stable/growing pricing, mostly limited competition and no patent cliff,” Kapadia said.

To be sure, while vaccine companies can see periods of high growth, real innovation is needed to be long-standing winners in a market that requires major capital and faces cheaper alternatives from emerging markets, the analyst cautioned.

Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on pinterest
Pinterest
Share on whatsapp
WhatsApp
Share on telegram
Telegram

Never miss any important news. Subscribe to our newsletter.

Leave a Reply

Your email address will not be published. Required fields are marked *

Enter email to receive ANR News articles, 2 free e-books, plus the Global Health Organisation Report

Donate Now to Help Take Back Our World

$1000 Donation Turns Into $4000 of the New Global Currency

Donate Now to Help Take Back Our World

$1000 Donation Turns Into $4000 of the New Global Currency

OWC (Our World Coin) Sponsorship Offer

If you donate to the Resistance you will receive major incentives.

Such as the following in Our World Coin which lists early 2022.

Plus if you donate over $2500 you will also receive 20% in Bitcoin 2.0