Indian vaccine producers see their prospects brighten up with many technology sharing deals, even as they strive to combine cost-effectiveness with higher quality demands. Driven by the strong need to contain healthcare costs, global vaccine suppliers are looking at contract manufacturing opportunities in developing countries. Indian manufacturers, who are known for low-cost production expertise, could become a viable option for cost-conscious companies seeking to outsource production aspects.

Over a dozen Indian players produce own versions of vaccines and biosimilars and market them in India and other emerging markets. Claiming to be the largest producers of recombinant hepatitis B and measles, mumps and rubella (MMR) vaccines in the world, Indian companies have also earned repute as suppliers of pediatric vaccines to UNICEF programs.

Global vaccine makers source vaccines – especially the basic pediatric vaccines – from India for emerging markets primarily due to the price realizations in tenders offered in an Indian cost structure, analysts said.

Vaccines can also rank high on the outsourcers’ agenda as they are a priority category among the biological products. “In the entire spectrum of biologic products, the degree to which vaccines can be characterized is the highest; hence vaccines lend themselves to outsourcing more than biosimilars,” pointed out V.Krishnakumar, executive director, Avendus Capital Pvt Ltd., an investment bank based in Mumbai.

Low-Cost Edge to New Generation Vax

Currently pegged at $100 million, the Indian vaccine business is growing at a pace of more than 20% annually as many companies started out building business in biologics with considerable success.

Basic vaccine players from India, however, need to partner with global vaccine majors to acquire enabling technologies that help them graduate to the production of more sophisticated, next-generation vaccines.

Heralding this trend, Cadila Pharma of Ahmedabad and Biological E of Hyderabad have recently formed joint ventures with U.S.-based Novavax Inc. and VaxInnate Corp. to utilize their proprietary virus-like particle and toll-like receptors technologies, respectively, to produce influenza and other vaccines (thanks to the H1N1 influenza pandemic and the resultant vaccine demand).

“The major advantage of the JV is the technology.We will be using Virus Like Particles (VLP) technology to manufacturer vaccines, which has the capacity to offer better quality vaccines in a relatively short span of time as compared to the other traditional technologies being used today,” said I.A. Modi, chairman, Cadila Pharmaceuticals Ltd.

Cadila Pharma is setting up a facility with a capacity to produce as many as 60 million doses of flu vaccines annually as part of the joint venture CPL Biologicals in the western Indian state of Gujarat, which will produce VLP technology-based products.

Novavax will also contribute technology to CPL for the development of several other VLP vaccine candidates against diseases such as hepatitis E and dengue fever. In return,Novavax will have the right to negotiate license arrangements of certain vaccines developed by CPL for commercialization in U.S. and worldwide outside India through a $7.5 million service contract over three years.

Similarly, under the VaxInnate/Biological E agreement, the latter has gained rights to manufacture TLR technology-based flu vaccine for India and South Asian countries.

High Potential; Few Players

According to Mr. Modi, India has established itself as a potential partner in contract research and clinical trials. This fundamental expertise has developed strong pharmaceutical industry ties that bode well for more such future integrations in vaccine production also.

Indian vaccine manufacturers have high potential for contract services in areas like basic research, molecular cloning and gene expression, development of cell lines for vaccines, fermentation and purification processes, clinical trials and manufacturing, in a highly cost-effective manner.

Though low-cost production has traditionally been their major plank, the Indian companies could find it difficult to meet ever-increasing demand for higher quality parameters at the lowest possible rates, in the days to come, opined vaccine experts.

“In today’s market customers need more value for the same cost or even lower cost. The focus today is therefore not on cost alone, whether you are a CMO or anybody else. For Indian companies this may be a challenge,” said Dr. Rajesh Jain, joint managing director, Panacea Biotec Ltd.

Panacea Biotec started a joined venture with Chiron Corp. (now Novartis Vaccines) in 2005 for marketing combo vaccines in India. One of the leading producers of biologics in India, the New Delhi-based Panacea also has a pact with Nederlands Vaccine Institute (NVI) of Netherlands for manufacturing and marketing of inactivated polio vaccine in global markets.

Indian companies have raised the bar and are today supplying vaccines to many countries across the globe. However, there are not many players to choose from as vaccine business is capital-, R&D- and knowledge-intensive, with long gestation and payback periods. It is also critical to find a partner that respects intellectual property rights of partnering companies, said Dr. Jain.

While global firms continue to be peeved at the uncertain IP climate, Indian vaccine players look at an unclear regulatory environment as a major challenge.


S. Harachand is a pharmaceutical journalist based in Mumbai. He can be reached at harachand@gmail.com.