Glaxo to Buy Flu-Vaccine Maker Amid Concern Over Pandemics
By JEANNE WHALEN
Staff Reporter of THE WALL STREET JOURNAL
September 8, 2005; Page D3
In the latest sign of the drug industry's growing interest in vaccines amid fears of new global pandemics, GlaxoSmithKline PLC said it agreed buy a Canadian flu-vaccine maker for about $1.4 billion.
Glaxo, the world's second-biggest drug maker by sales behind Pfizer Inc., said it would pay 35 Canadian dollars ($29.44) for each share of ID Biomedical Corp., as well as assume $77 million in debt. Both companies' boards have approved the acquisition, which is subject to ID Biomedical shareholder approval, the companies said.
Glaxo's move is the second push by a big pharmaceutical company into vaccines in recent days. Last week, Swiss drug giant Novartis AG bid $4.5 billion for the 58% of vaccine maker Chiron Corp. that it doesn't already own. Earlier this week, Chiron's board rejected the offer of $40 a share as "inadequate," prompting analysts and investors to bet that Novartis would have to increase its offer for the company, based in Emeryville, Calif. Novartis has declined to comment on its plans.
Glaxo and Novartis are keen to supply the U.S. market with traditional flu vaccines. A shortfall in flu-vaccine production last year left the U.S. scrambling for shots and companies eager to increase future production.
The drug makers also are interested in inventing and producing vaccines to deal with new viruses like avian flu, which health experts increasingly warn could mutate into a global pandemic. The virus first appeared in Asian birds and recently has migrated to birds in Russia. The U.S. and other governments have been pushing government scientists and companies to come up with vaccines to protect against the new bugs.
"We've woken up to what experts around world have been preaching for a decade -- that there are new strains out there that with a simple mutation could become viruses that could spread from human to human," David Stout, president of pharmaceutical operations at Glaxo, said in a phone interview.
Glaxo, based in London, has predicted the global market for vaccines could quadruple by 2015 to £17 billion to £24 billion -- or about $31 billion to $44 billion -- from £5.2 billion today.
ID Biomedical, of Vancouver, British Columbia, supplies about 75% of the Canadian government's vaccines for traditional influenza. The company is awaiting U.S. Food and Drug Administration approval of its vaccine, called Fluviral. Last week, Glaxo won FDA approval to sell another flu shot, called Fluarix, in the U.S. Glaxo is investing to double production capacity of its main Fluarix plant in Germany.
Chiron had dominated the U.S. market for flu shots in recent years, but contamination problems at Chiron's main factory last winter left the company unable to deliver supplies. Chiron says it is working to fix those problems.
ID Biomedical is expanding its Canadian manufacturing facilities, and some capacity could be used to produce an avian-flu vaccine if Glaxo succeeds in inventing one, Mr. Stout said. Rival Sanofi-Aventis SA, of France, has discovered an avian-flu vaccine that proved effective in a trial whose results were announced last month; Glaxo, Chiron and others also are racing to discover a vaccine. |
