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Business News/ Companies / Drugmakers set to sell H1N1 vaccine but margins dicey
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Drugmakers set to sell H1N1 vaccine but margins dicey

Drugmakers set to sell H1N1 vaccine but margins dicey

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Mumbai: Almost a year after India reported its first swine flu death in August 2009, four Indian drugmakers are set to compete for an estimated Rs30-billion indigenous H1N1 vaccine market in the country.

Analysts, however, do not see this market contributing much to the bottomline of the companies on lower volumes and a calming of the fear about the pandemic.

The estimated market size for H1N1 vaccine over next 12 months would be about 4-5 million doses in case of high-risk population, Pankaj Patel, chairman of Cadila Healthcare told Reuters in April.

While Ahmedabad-based Cadila launched the first indigenous H1N1 vaccine under the ‘VaxiFlu-S’ brand last week, three others are expected to roll out their versions in the next 2-3 months.

India’s largest vaccines maker, Pune-based Serum Institute of India, Panacea Biotec and New Delhi’s Bharat Biotech International are the others in the fray.

“The present market size for H1N1 vaccine in India is about Rs30 billion if it is distributed through the huge public healthcare network we have... but the sales would be very low if sold through the private route," Siddhant Khandekar, an analyst with Sunidhi Securities & Finance said.

Khandekar said his estimate was based on the requirement for the vaccine for the year 2010-11.

“The cost is more than Rs300 per dose... But margins wise, this is not a huge opportunity," he added.

“Now that the pandemic fear is gone, even the companies are saying the profit margin opportunity is not there."

While Cadila plans to take the retail distribution route for its VaxiFlu-S, Panacea is looking to sell the vaccine to the government.

Since August 2009, India has reported 1,531 deaths of H1N1 infections, data on the federal health ministry’s website showed. “Though the managements have been positive in terms of volumes they can generate, the private consumption looks challenging," Sarabjit Kour Nangra, vice president, research, Angel Broking, said.

“We should see net profit margins of about 5-8% with the kind of volumes the companies are expecting."

Interestingly, Serum Institute is eyeing ‘school children’ as the primary market segment for its vaccine to be priced about Rs150-190 a dose.

“We cannot forecast a market in case of a pandemic, since the vaccine is not a consumer product," Rajeev Dhere, senior director, Serum Institute of India, said.

“There will be some number of individuals we need to protect, which includes healthcare workers and school children."

School children and college goers is a huge population for the vaccine, he added.

While Serum would take another two weeks for the launch, Panacea Biotec expects its vaccine to hit the market by September, an official who did not wish to be named, said.

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Published: 08 Jun 2010, 01:28 PM IST
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