Big Vaccine Plans for Glaxo

GlaxoSmithKline (GSK Quote) said Thursday it would double its annual flu vaccine production by 2008 as it seeks to enter the U.S. market and expand its efforts worldwide.

The announcement was part of a broad review of its vaccine strategy, as GlaxoSmithKline discussed its vaccine plans for the developing world -- including diseases like malaria and dengue fever -- as well as for competing with giant peers such as Sanofi-Aventis (SNY Quote) and Merck(MRK Quote)on multiple disease fronts in the U.S. and Europe.

Much of Thursday's vaccine discussion isn't new, but taken together, the projected launching of five new vaccines in the next five years could add $11 billion to $18 billion in revenue by 2010. And that doesn't count another 15 products in earlier stages of development. "[Our] vaccines business is set for rapid growth," said David Stout, president of pharmaceuticals for the company, which is based in London and Philadelphia.

More important than the higher sales or potentially higher stock price is the public health impact of more vaccines.

The doubling of flu vaccine production should, among other things, provide greater predictability and stability to the U.S. flu vaccine supply, which has fluctuated over the years.

Last year, U.S. public health officials had expected about 100 million doses to be available, but the number was drastically reduced when manufacturing problems at a Chiron (CHIR Quote) plant in the U.K. caused the canceling of some 48 million to 50 million doses.

Although Chiron has received the go-ahead from British health regulators to resume production, it still must get approval from the U.S. Food and Drug Administration to sell vaccine for the upcoming flu season. The FDA should make a decision in a few weeks.

Even if the FDA gives the go-ahead, Chiron has warned that it won't provide as much vaccine as it had planned to provide during the previous flu season. Sanofi-Aventis will provide most of the U.S. flu vaccine for the 2005-2006 season.