Bvgh Bcg Report

Report By Bio Ventures For Global Health & Boston Consultancy Group

A model to evaluate business & social case for TB Vaccine

Evaluation Team 

BVGH executives



BCG advisers



Advisers from AERAS



Major commercial players 

Intercell



Crucell



GSK

Objective 

To build case for private sector investment in TB vaccines −



Reveal gaps where donor involvement may improve market opportunity

Primary research conducted in − − − − − − −

India China South Africa Nigeria Russia Brazil US

Study Overview 

Demand of TB vaccines will vary across different markets 

 

Public sector markets in low & middle income countries Private markets in low & middle income countries Markets for high risk individuals in high income countries

Product profiles 





BCG Replacement vaccine 

Administered at birth



70% effective for 10 years

Booster vaccine (Boosts existing BCG) 

Administered to infants at 14 weeks



One dose at 10 year intervals (70% effective)

Prime boost strategy 

Combination of − −

BCG replacement at birth Booster administered at 10 yrs interval (80% effective)

Business case 

Base case 

BCG replacement −



Booster vaccine −



$ 800 Mn

Prime boost (Both replacement & booster) −



$ 450 Mn

1 Bn

Market sufficiently high to attract industry investment 

Generating positive risk adjusted net present value & Internal rates of return in excess of 20%

Social case 

In Asia & Sub – Saharan Africa 

17 – 62% reduction in TB deaths



20 – 45% reduction in DALYs −

At cost of $6 to $ 26 per DALY depending on product profile

DALY: Disability Adjusted Life Years

Challenges 

Vaccine development & Supply chain 



Can be overcome through targeted donor interventions

Need for highly predictive biomarkers 

There are no surrogate markers for TB to predict efficacy of TB vaccine − −

Phase III trial will take 3-4 yrs Require large patient populations

Challenges 

Shortage of clinical test sites 



Investments required to establish additional trial sites which are needed to support current vaccine pipeline

Public support for supplying developing countries with TB vaccine 

Cost of technology may be high for devoloping countries to afford it

Focus 

Potential return on industry investment



Product profiles needed to capture market



Regulatory & distribution pathways

Analysis 

5 key components − −

Mapping the disease burden & current R&D landscape Developing range of market scenarios based on 3 distinct product profiles   

− − −

Assumptions about price Countries willingness to pay Time to adoption

Estimating development & supply costs Evaluating financial & social ROI for industry Identifying key success factors for introducing new TB vaccine in developing world

Disease description 

Airborne transmission 



Globalization & widespread travel makes it a global threat

Establish a latent infection that is clinically dormant for years

Outdated & Inadequate tools 

Prevention 

BCG recommended in high burden countries −

Not used in US & parts of EU 



Where TB is less prevalent & controlled by antibiotics

BCG shows variable efficacy − − −

Effective in reducing rate of severe pediatric TB (such as TB meningitis) 10 years of protection against pulmonary TB Does not protect adults against pulmonary TB 

Which is most common form of active TB

Outdated & Inadequate tools 

Treatment 

6 to 9 months treatment regimen −





With 3 – 4 antibiotic drugs

Low patient compliance led to emergence of MDRTB Directly Observed Therapy Short Course (DOTS) −

Recommended TB method is effective 

−



But is unlikely to have significant impact on incidence

Regular observation of lengthy treatment regimen by health worker is difficult in developing world

Best hope to bring TB under control in face of HIV/TB & MDR-TB lies in vaccine

Partial pipeline

Drivers 

Product profile & Pricing influence demand



Product profiles 



70% efficacy is minimal target threshold for vaccine efficacy Safety at least as safe as BCG −

Safe to administer to HIV+ve infants

Base case assumptions

Development & Production Costs 

BCG replacement − −



Booster − −



Production cost: $0.5 - $2 per dose Non attrition adjusted development cost - $194 Mn Production cost: $5 - $10 per dose Non attrition adjusted development cost - $203 Mn

Attrition adjusted R&D cost 

To get 1 vaccine to market −

$600 - $800Mn (35% chance that 1 vaccine will be successful)

Development & Production Costs 

Total investment: −



Several 100 Mn when cost of manufacturing capacity is included

Looking at current manufacturing capacity that can be utilized for new vaccine −

Additional investment of $200 Mn may be necessary to meet global demand

Timing 



First successful product is likely to be licensed by 2013 – 2015 Longest & costly stage of development is Phase III 

To demonstrate protection in large sample of at risk individuals −

Phase III trials will take 3 – 4 years

Pricing & Market penetration 

Public Sector markets in low & middle income countries 

$14 - $15 per regimen in middle income countries



$3 per regimen in low income countries



For India & China − −

Price sensitive markets Less than $ 1 per regimen

Pricing & Market penetration 

Private markets in low & middle income countries 

3 factors drive vaccine uptake − − − −

Unavailability of vaccine in public market Perception that product is an improvement over existing products Willingness to pay out of pocket for vaccines $26 - $29 per regimen

Pricing & Market penetration 

Markets for high risk individuals in high income countries 

Vaccine would be only adopted for high risk population such as − − − − − −

Health care workers Prison populations Nursing home residents HIV patients Immigrants $50 - $100 per regimen

Distribution channels 

BCG replacement can use same channel as BCG 



Resulting in high uptake

Booster can be given during one or more visits scheduled for 

WHO Expanded Programme on Immunization −



Typically up to 3 doses before age one

School vaccination programme can prove successful −

Ability to work through schools is evaluated in adolescent epidemiology studies in IN & SA

Market Demand 

BCG Replacement 



Majority demand from developing countries

Booster 

Middle income markets will demand bulk doses

Business Case for Investment 

NPV: $35 Mn – $125 Mn



IRR: in excess of 20% from 2013 – 2030



Discount rates 

Pharma Co: 10 – 15%



Biotech Co: 20 -25% −

If company receives R&D funding from donor or PDP 

Lower discount rate

NPV: Net Present Value IRR: Internal Rate of Return PDP: Product development partnership

Base Case 

BCG Replacement 

Global annual market : $450 Mn



Doses: almost 60 Mn



At market peak − − −



High income market will generate half of revenue Remainder from doses needed by low & middle income markets Public market in low & middle income countries expected to generate $90 Mn

At 20 % Discount Rate −

NPV = $35 Mn & IRR = 25%

Base Case 

Booster 

Global annual market : $800 Mn



Doses: almost 40 Mn



High income markets driving revenues −



Remainder doses uptake by − −



$400 Mn Private market in low & middle income countries Public sector markets in middle income countries

At 20 % Discount Rate −

NPV = $125 Mn & IRR = 32%

Base Case 

Prime boost strategy 

Global annual market : $1 bn



Doses: almost 100 Mn



Revenue drivers − −



High income markets driving revenues Private market in low & middle income countries

At 20 % Discount Rate 

NPV = $41 Mn & IRR = 22%

Cash Flow by Year & Market

Social Case of investment 





BCG Replacement 

17% reduction in TB deaths



20% reduction in DALYs by 2029

Booster 

40% reduction in TB deaths



22% reduction in DALYs by 2029

Prime boost 

62% reduction in TB deaths



45% reduction in DALYs by 2029

Social Case of investment

Social Case of investment 

Investment in TB Vaccine 



Highly cost effective for public sector donors

World bank considers health interventions that cost within $100 per DALY 

Vaccine falls within this range

Challenges & Opportunities 

Lack of surrogate markers that predict clinical efficacy of vaccine 

Investment in highly predictive biomarkers that correlate with protection from disease −

Could have dramatic impact in reducing length of CT

Challenges & Opportunities 

Shortage of CT sites 

Aeras is setting up CT sites in India and SA −

Still a need for additional sites to support the current pipeline 

−

1-2 Phase III trials can be started in the next 2-3 years

European and Developing Countries Clinical Trials Partnership to fund development of additional trial sites 

It is anticipated that these trial sites may be ready in three years

Challenges & Opportunities 

Limited public sector financing to assist Low income countries 



Will lead to slower adoption of BCG replacement vaccine Booster vaccines will not be administered in low income countries −

Costs exceed $1 per dose

Challenges

Opportunities for innovation 

Strong donor commitment to vaccine development 

Bill & Melinda Gates Foundation − − −

In 2004 invested $82.9 Mn through AERAS US is largest public provider of R&D support EU has made commitments 



Most of these funds directed to basic research

Financing mechanisms such as Advance Market Commitments (AMCs) −

G8 governments are considering this option 

This would guarantee market for TB vaccines in developing countries

Opportunities for innovation 

BVGH worked with World Bank & GAVI 

To estimate size of AMC necessary to incentivize industry − −



BCG replacement: $360 Mn Booster: $3.8 bn

Partnering with emerging manufacturers 

Would reduce development costs

GAVI: Global Association of Vaccine & Immunization

Opportunities for innovation 

Investment in new diagnostics 

Availability of diagnostic would improve uptake of booster vaccine − −

As booster vaccine would not work on people already infected with TB TB experts say that such diagnostic is technically feasible & may be made available by the time vaccine reach phase III

Pipeline Diagnostics Company

Kit

Phase

FIND/Tauns Co. Ltd.

Capilia TB test

Phase III

Sequella

Transdermal TB Patch

Phase III

Tyrian Diagnostics /FIND

TB DiagnosticIQ™: rapid antigen-based

Preclinical

FIND and partners

Mycobacterial lipoarabinomannan (LAM) antigen detection in urine

Preclinical

FIND/Cepheid / UNDMJ

GeneXpert System TB

Preclinical

FIND/Eiken Chemical

Preclinical

ChemBio/IDRI

LAMP-based dx Serologic rapid TB test using Dual Path Platform [DPP™]

FIND and partners

Dipstick antibody test

Discovery

FIND and partners

Urinary NAAT

Discovery

Discovery

Conclusion

Thank You