Vaccines set for M&A wave, Serum Institute CEO predicts

Vaccine

The vaccines industry is set for consolidation in the coming years as prices are forced downward and small companies struggle. At least, that’s the case if you listen to Serum Institute of India CEO Adar Poonawalla, who hopes his company will be on the buying end and not the selling end. 

Poonawalla told Bloomberg that Serum Institute of India is considering raising up to $3 billion through debt and equity to scoop up smaller vaccine players. No emerging markets vax companies could fetch more than $1 billion, Poonawalla said, adding that his company could do more than one buy.

As Poonawalla sees it, low-priced vaccines from new entrants will continue to weigh on competitors, and small players with few options will be forced to consider sales. "This is the lull before the storm,” he told the news service. “You are going to see either acquisitions or mergers.”

It’s a change in tone from last fall, when privately owned Serum Institute--which claims to be the world’s largest vaccine maker by doses--called off a 10% stake sale at a valuation of up to $12 billion. At the time, the company cited market volatility, but Poonawalla told Bloomberg that it was partly due to the fact that some buys Serum had been scouting were pulled off the market.

The vaccine giant, formed by Poonawalla’s billionaire father Cyrus, has been working to undercut Big Pharma vaccine manufacturers in emerging markets, FierceVaccines previously reported, providing a range low-cost vaccines. Aside from the Serum Institute, Takeda and Merck JV Hilleman Labs have previously demonstrated an interest in growing in the low-cost vaccine space.

Serum will see profit fall by up to 20% this year on low generic vaccine prices, the CEO told Bloomberg, but the company expects to rebound with new vaccines against pneumonia, rotavirus and rabies.

Related Articles:
Serum Institute of India throttles back on equity sale
Takeda, Hilleman eye low-cost vaccine space

Suggested Articles

Trump has said the coronavirus outbreak doesn't pose a major threat to the U.S., but the White House is weighing naming a "czar," Politico…

After a major label expansion in December, Amarin's Vascepa is preparing a major boom in sales with its marketing team nearly scaled up.

The FDA has found issues with the testing practices of a U.S. generics maker that had specific problems with ADHD and weight-loss drugs.