Developing specialty vaccines for emerging and overlooked infectious diseases is a challenging and rewarding enterprise with specific opportunities and problems. Large companies have not historically prioritized this area and instead have focused on the development and commercialization of routine vaccines and vaccines for diseases with more significant global markets.
For example, the “big four” – GSK, Merck & Co., Inc., Pfizer Inc., and Sanofi – represent a big proportion (around 80%) of global vaccine revenues. [i] Approximately two thirds of available vaccines target at least one pathogen or disease for which the World Health Organization recommends routine immunizations for children. [ii] Most vaccines on the market are for meningococcal disease, polio, seasonal influenza and viral hepatitis.[iii]
There are many challenges in pursuing the development of specialty vaccines for emerging and overlooked infectious diseases, namely in financing and R&D.
Investments in specialty vaccines for overlooked infectious diseases are likely to be labeled as risky. This is due not only to attrition rates in vaccine R&D, but also due to the size, location and severity of outbreaks, which are difficult to predict. Companies have little certainty in regard to the market potential of newly developed vaccines. With that said, there is still a significant unmet need, and specialty vaccines are needed to protect against the public health threat that these overlooked infectious diseases represent.
“Specialty vaccines developed for conditions that are often associated with global outbreaks or diseases of the developing world represent a smaller market opportunity than routine vaccines,” said Nima Farzan, Chief Executive Officer and President of PaxVax, a specialty vaccine company.
“It can be difficult for large drugmakers to prioritize R&D for overlooked infectious diseases, because of more limited market size and the fact that they have to compete against all the different opportunities that they have,” Farzan said. “For a smaller company, even a modest opportunity can move the needle. If we have the financing and the technical capability, we’re willing to make that investment.”
Additionally, halting the spread of emerging infectious diseases requires rapid development of effective vaccines. R&D must be reactive, or undertaken in response to disease outbreaks, flexible, and must use consistent technologies and processes that are highly standardized and reproducible to allow for application across diverse pathogens. Farzan added: “R&D presents a technical challenge, because overlooked diseases come and go, and it’s often difficult to know where to set up field trials. For example, Zika was big in Brazil two years ago but then moved elsewhere.”
This type of R&D is challenging to large pharmaceutical companies because traditional approaches to research, such as random target identification, are more time consuming. The processes often fail to produce effective vaccines against emerging infectious diseases.
Despite the challenges, there are opportunities in the development of specialty vaccines for overlooked infectious diseases, especially for smaller companies with a more specific focus, such as PaxVax. Specialty vaccines don’t require the infrastructure that traditional vaccines do. They allow for a more targeted commercial footprint and typically require lower R&D expenditures, making them ideal for development by smaller companies.
There is an opportunity for specialty vaccine development for overlooked infectious diseases. “What were at one time relatively small and overlooked diseases are starting to be more globally felt as a result of increased travel and climate change. Ultimately, as the specialty vaccine space becomes more attractive and R&D investment becomes more important, there will be greater emphasis placed on developing the products for these diseases,” Farzan said.
Additionally, there are very few companies that only focus on vaccines and even fewer with a fully-integrated model spanning R&D through manufacturing and commercialization.
One company that saw an opportunity to carve out a niche in the market by building a business with a focus on specialty vaccines is PaxVax. It addresses a significant need by responding quickly to emerging and overlooked infectious disease areas often neglected by large pharma. Unlike larger companies, PaxVax is willing to serve narrower markets, such as travel, government (e.g., military and pandemic preparedness) and endemic settings. Its size, independence and focus allow it to pursue vaccines in areas where few or no vaccines currently exist.
PaxVax has seen quite some success in this arena: the company has two products on the market – an oral typhoid vaccine and an oral cholera vaccine. The typhoid vaccine is currently licensed in more than 20 countries and is the most prescribed travel vaccine in the U.S. with more than 150 million doses sold worldwide since approval. As it relates to the cholera vaccine, PaxVax was able to complete development from IND to approval in less than five years and was granted a priority review. Both vaccines are currently sold to travelers via travel clinics and military/government sectors.
Given the importance of uninterrupted manufacturing and supply for vaccines, it is worthwhile to mention that the company has also received positive feedback for its products from the U.S. Food and Drug Administration and The Swiss Agency for Therapeutic Products auditors during recent inspections. “I’m quite proud that as a small company, we manufacture our products and have achieved the highest level of quality required by regulators,” Farzan said.
Additionally, PaxVax has a rich pipeline that includes programs for chikungunya, Zika, adenovirus 4/7 and HIV. The company just announced the initiation of a Phase 2b trial for its chikungunya vaccine licensed from the U.S. National Institutes of Health. Chikungunya is an acute febrile disease with headache, muscle pain and skin rashes, with severe, often debilitating, joint pain in infected patients that can persist for years, especially in adults. There is currently no vaccine available to protect against chikungunya.
The company’s R&D infrastructure is a model for other smaller biopharma companies looking to enter the specialty vaccine market. It is scalable and can incorporate other products either from PaxVax internal pipeline or through acquisition. It serves as a foundation for faster, more effective vaccine development that may protect against future public health emergencies and allows PaxVax to develop and commercialize its products more efficiently.
PaxVax has used a variety of approaches to fund its products and pipeline. “There is no one-size-fits-all approach for financing – one has to be flexible,” Farzan said. PaxVax is willing to explore multiple different avenues of funding – dilutive and non-dilutive funding, private equity financing and strategic partnerships.
In 2007 and 2013, PaxVax locked down venture capital investment through Series A and Series B equity financing. In 2015, the company secured a $105 million investment from Cerberus Capital Management. The company is also using prior private equity investment to fund the chikungunya R&D program.
PaxVax is currently collaborating with the government to develop vaccines for adenovirus 4/7, Zika and HIV. “Funding for the adenovirus 4/7 project comes entirely from the U.S. Department of Defense,” Farzan said.
Additionally, Farzan highlighted an organization called Coalition for Epidemic Preparedness Innovations (CEPI), a public-private coalition that aims to finance and coordinate the development of new vaccines to prevent and contain infectious disease epidemics.
In summary, even though developing specialty vaccines can be seen as a risky enterprise, it also has tangible benefits. Smaller companies, such as PaxVax, have found a niche in the market by developing scalable infrastructure to spur vaccine development. The company’s success points to a largely untapped opportunity for pharma looking to invest in a growing market.
[i] Access to Medicine Foundation: “Access to Vaccines Index 2017.” Available at https://accesstovaccinesindex.org/media/atvi/2017-Access-to-Vaccines-Index.pdf. Accessed April 17, 2018.
[ii] Access to Medicine Foundation: “Access to Vaccines Index 2017.” Available at https://accesstovaccinesindex.org/media/atvi/2017-Access-to-Vaccines-Index.pdf. Accessed April 17, 2018.
[iii] Access to Medicine Foundation: “Access to Vaccines Index 2017.” Available at https://accesstovaccinesindex.org/media/atvi/2017-Access-to-Vaccines-Index.pdf. Accessed April 17, 2018.