Serum's Bilthoven acquisition opens door to cut-price polio vaccine in Europe and US
This article was originally published in Scrip
Serum Institute's acquisition of the government-owned Dutch manufacturer of monoclonal antibodies and vaccines, Bilthoven Biologicals, is expected to change the market dynamics for injectable polio vaccines, the capability and technology for which is currently vested in just three global facilities. The buyout will also provide the Indian firm with a manufacturing foothold in the West, boosting its plans to expand into Europe and the US.
Adar Poonawalla, Serum's executive director and son of founder-chairman Dr Cyrus Poonawalla, told Scrip that Serum hopes to bring down significantly the cost of the injectable polio vaccine, which is seen as the best hope for the eradication of the virus. "If it's being sold for about €2.5-3 per dose, we can easily halve that," Mr Poonawalla claimed, but added that the registration process for certain markets could take up to two years. GlaxoSmithKline and Sanofi are currently the other key players in the segment.
Developed by Dr Jonas Salk in the 1950s, the "Salk vaccine" consists of inactivated poliovirus strains of all three poliovirus types and is given by intramuscular injection. It is considered to be safer than live attenuated oral vaccines, which have a slightly elevated risk of vaccine-associated polio paralysis.
Dr Cyrus Poonawalla, chairman of the Poonawalla Group and Serum Institute, said that the acquisition also gives the group an important operational and strategic beachhead in Europe and the US, with a manufacturing base in the Netherlands. "This will also significantly enhance our earlier offerings in the paediatric vaccines segment including DPT [diphtheria, pertussis, tetanus], measles and MMR [measles, mumps and rubella] vaccines," Dr Poonawalla added.
The buyout, Serum's first overseas acquisition, involves an initial outlay of €32 million for 100% of Bilthoven, though the total acquisition cost including upgrading the operation will be about €80 million over a three-year span. Mr Poonawalla added that Serum could invest an additional €15-20 million towards expanding capacity and infrastructure at Bilthoven.
He also indicated that Serum had an appetite for more purchases in the vaccine space and that the company's balance sheet was strong, with the current deal being financed largely through internal accruals and just a small debt component.
Serum is known to have previously looked at the Indian firm, Shantha Biotechnics, which was eventually snapped up by Sanofi from Mérieux Alliance in 2009. Serum also has a holding in Xenetic Biosciences, formerly known as Lipoxen, and the Indian firms Orchid Chemicals and Pharmaceuticals and Panacea Biotec, though both are considered long-term investments and have no acquisitive undertones.
Bilthoven
Founded in 2011 as the result of a demerger from the government-based Netherlands Vaccine Institute, Bilthoven, which is based in the city of the same name near Amsterdam, has a manufacturing facility spread over 20 acres and employs over 200 people. The site has a capacity of more than 20 million doses of vaccines a year, which are sold in Europe and developing countries.
A statement from Bilthoven said that it now positions itself as a contract manufacturer of monoclonal antibodies and other biologicals, in addition to its extensive vaccine portfolio. It expects to profit from the new ownership by acquiring access to new markets and new product opportunities, the statement added.