The World Health Organization (WHO) has cleared the way for artemisinin-combination therapy (ACT) manufacturers to use Sanofi's ($SNY) semi-synthetic active ingredient. WHO acceptance comes one month after Sanofi began producing the active as an alternative to plant-derived artemisinin.
Reliance on natural sources of artemisinin--which is extracted from sweet wormwood trees--left the supply of a vital ingredient vulnerable to natural factors. Worse still, the uncertainty created a nervy, speculative market in which prices reportedly moved from $400 to $1,000 a kilogram as sentiments changed. It is hoped Sanofi's alternative, more predictable supply will stabilize the market.
"Having multiple sources of high-quality artemisinin will strengthen the artemisinin supply chain, contribute to a more stable price, and ultimately ensure greater availability of treatment to people suffering from malaria," Global Fund to fight AIDS, Malaria and Tuberculosis advisor Scott Filler told IRIN. There are technical and bureaucratic barriers to clear before Sanofi's semi-synthetic artemisinin begins to shape the market, though. ACT manufacturers need to formulate versions of their products using Sanofi's active and submit a revised WHO prequalification application.
Sanofi plans to produce 35 tons of artemisinin this year, scaling up to 50 to 60 tons in 2014. At capacity, this gives Sanofi enough active ingredient to manufacture up to 150 million ACTs. Last year, 289 million WHO prequalified ACTs were procured, according to UNITAID. Consequently, Sanofi has enough capacity to capture half the market, yet observers think it will take time to win share. Médecins Sans Frontières' malaria head Martin de Smet said: "We don't expect to see change overnight. Even if we see [Sanofi] getting 10% and eventually 20%, this will help ease speculation about the product's availability and stabilize prices."
- here's the IRIN article
- check out the WHO release