By Ludwig Burger
WAVRE, Belgium (Reuters) – GlaxoSmithKline said further growth from its shingles vaccine, which has boosted earnings, would be reined in by limited capacity until 2024, but a new bioreactor facility would then be ready to bring a step change in production.
GSK, Britain’s largest drugmaker, had originally envisaged a gradual launch in the United States, its biggest market, but regulators unexpectedly recommended Shingrix not only for people reaching the age of 50 but also to replace an established product.
A bioreactor complex in Belgium that makes so-called antigens – proteins that trigger an immune reaction against the shingles virus – is reaching its capacity limits. A second facility is in the works at an undisclosed location, but it takes time to build.
“The key project is the expansion of antigen bulk production which will come online in 2024. That will be what will create the next step change in our capacity,” said Roger Connor, president of GSK’s vaccines business, speaking at the unit’s main site in Wavre, near the Belgian capital of Brussels.
Until then GSK is working on more than 20 other projects to stretch higher production, aiming to increase the number of Shingrix doses to a “high teens of millions” in 2019.
In 2024 “you’ll see tens of millions of increase, rather than single digit millions,” Connor added.
With 5.9 billion pounds ($7.55 billion) in 2018 sales, vaccines account for almost a fifth of group sales but the unit will play a bigger role after the planned separation of GSK’s consumer products unit, which has been folded into a joint venture with Pfizer.
Sales from Shingrix more than doubled to 1.28 billion pounds ($1.64 billion) during the first nine months of the year, but analysts have warned that the pace was unsustainable due to production limitations.
Shingrix has won over regulators in North America, Europe and China with trials where it prevented 90% of Shingles cases in the immunized group.
Caused by the varicella-zoster virus behind chickenpox, the disease can trigger rashes and severe pain in the elderly.
The Chinese market is roughly on par with the United States, but limited capacity means it is a distant opportunity, Connor said.
GSK reckons that 115 million Americans aged 50 and older are eligible to receive Shingrix, but so far only 9-10 million of them have received at least one of the two doses that are needed for immunization.
“We will have to start preparing other markets at the right time, depending on when we believe the U.S. is going to peak and what level of penetration of the 115 million will be achieved,” said Connor.
“This will all determine when the next launches can be supported, including China,” he added.
(Reporting by Ludwig Burger; Editing by Mark Potter and Louise Heavens)