Novartis' announcement earlier this week that it is snapping up an 85 percent interest in China's Zhejiang Tianyuan Bio-Pharmaceutical Company underscores Big Pharma's appetite for a big slice of the growing worldwide market for vaccines. As the Wall Street Journal notes, this is just the most recent in a string of such deals, which includes Sanofi's move last summer to acquire Shantha Biotechnics, a big player in India and the rest of the developing world.
While the vaccine makers have been reaping a bumper crop of multibillion-dollar sales to wealthy countries like the U.S., it's emerging markets like China and India that will offer much of the future demand for vaccines. As these countries grow more affluent, their governments are becoming more ambitious with new vaccination campaigns. And Sanofi, Novartis and others want local companies under their wings that can satisfy that demand. These Third World vaccine companies are also a low-cost center for new vaccine development.
Tianyuan is small but growing fast, doubling sales from 2006 to 2008. And Novartis says that it intends to "expand Tianyuan's product portfolio and R&D pipeline" while using it as a conduit for its existing lineup of vaccines. That's all good reason for Novartis to forecast continued double-digit growth for its vaccine business in the years to come.
- read the story from the Wall Street Journal