GSK, Biological E partner on childhood vaccine

Small Indian vaccine makers are starting to drum up low-cost shots for developing countries and Big Pharma wants to compete with these up-and-coming rivals. GlaxoSmithKline ($GSK) announced an agreement to team up with an Indian venture to produce a 6-in-1 vaccine to protect against polio and 5 other diseases.

GSK will form a 50-50 venture with India's Biological E to create a shot that combines GSK's polio vaccine with a Biological E vaccine that protects against diphtheria, tetanus, whooping cough, hepatitis B and Haemophilus influenzae type b. The move comes after Indian billionaire Cyrus Poonawalla, founder of the Serum Institute of India, vowed to slash the price of polio immunization to a third or quarter of its price. Poonawalla wants to introduce a polio shot that costs as little as €0.7 (93 cents) in multidose vials, a significant price drop from a €2.5 ($3.36) jab now on the market.

Cyrus Poonawalla

Pricing for polio vaccines varies around the world. In the U.S., the Centers for Disease Control and Prevention has a contract with Sanofi ($SNY) to buy e-IPV at $12.24 a dose, according to the organization's website. And GSK sells Pediarix, a DTaP/Hep B/IPV vaccine, through a CDC contract at $52.10 a dose. Both GSK and Sanofi's contracts with the government agency expire in March. GSK and Sanofi are the largest suppliers of the injectable polio vaccine.

Several Big Pharma players already have Indian vaccine units. Sanofi acquired Hyderabad-based Shantha Biotechnics for $602 million in 2009. And Pfizer ($PFE) made clinical research investments of $1.18 million in India.

But Poonawalla and his growing vaccines company aren't just taking aim at polio. The billionaire announced plans to sell a low-cost pneumococcal shot as an answer to Pfizer's $4 billion Prevnar vaccine. In 2015, the Serum Institute also wants to start selling a rotavirus vaccine to compete with Merck's ($MRK) RotaTeq and GSK's Rotarix.

- read GSK's release
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here's Bloomberg's take on Poonawalla