Booming vax industry inspires aggressive dealmaking

Over the past few years the vaccines industry has grown from a therapeutic sideshow to one of the main attractions of biopharma. As the Wall Street Journal pointed out, three big deals early this week underscore just how much things have changed.

First, J&J plunked down $441 million for an 18 percent stake in Crucell, drawn by the prospect of developing new shots for seasonal flu. Abbott agreed to buy Solvay--which works in the field--for $6.6 billion and Merck landed a deal to market CSL's seasonal flu vaccine. That all happened inside a period of just a few days.

What happened? First, the money got to be much bigger. Vaccine sales took off several years ago and continue to outpace the sales growth of prescription meds. Vaccine sales are largely immune to competition from generics, sweet relief for Big Pharma companies looking to replace billions of dollars in revenue lost to the copycats. And as swine flu has proven, the payers here--governments around the world--have a big appetite for vaccines and are highly motivated to stockpile reserves.

"If you have a new vaccine for a new type of meningitis or swine flu, that clearly is a major public-health issue and, therefore, the willingness to pay is going to be greater," said Murray Aitken, senior vice president of health-care insight at IMS Health.

- read the article from the Wall Street Journal