Opportunity Analysis of H1N1 (swine flu) Vaccination Market

H1N1 Influenza A (2009) is the first pandemic influenza of 21st century affecting more than four lac people in more than 180 countries across the globe in 2009. The flu broke in Mexico in the month of March and then affected U.S. and after that it spread across the globe. H1N1 (2009) influenza have a mutation of pig, bird and humans which has made it more dangerous and fatal compared to previous occurrence of H1N1 (1918). ( http://www.bharatbook.com/Market-Research-Reports/Opportunity-Analysis-of-H1N1-swine-fluVaccination-Market.html )

The pandemic outbreak of the influenza opened the gates for the drugs such as Tamiflu in the initial phase for the curing of the disease but the following phase will see a shift from curing to prevention. Thus, arise the requirement for the vaccine for the treatment of H1N1. H1N1 vaccine market is the forecast for the upcoming vaccines for the prevention of the disease among the unaffected population. The vaccines market is classified for the intramuscular vaccines and intranasal vaccines. Intramuscular will cater 80-85% of market revenues and the remaining will be tapped by the intranasal vaccines. The initial lot of vaccines will be of egg based and cell based manufacturing. The market forecast is from late 2009 as the first lot of doses are expected to be rolled out in the first week of October 2009.

The first movers of the in the vaccines market are Glaxo Smith Kline (GSK), Novartis, CSL, Medimmune, Baxter, Sinovec and Sanofi Pastuer. Medimmune is the only producer of the intranasal vaccine whereas other companies are expected to come out with intramuscular vaccines. The companies have got approvals for their first lots from the governments of the various countries such as U.S., U.K., France, China, Denmark and Australia. The involvement of government bodies, increased awareness about prevention and pandemic situation of the influenza is driving the market for the vaccines. Due to intensive ongoing research and technology introduction, the market players are compelled to understand the market dynamics, innovations, pricing, products, marketing and regulatory framework of the market.

The global H1N1 Influenza vaccine market is estimated to be of 676 million in 2009 with first lot of doses being commercialized on 30th September’ 2009. The market will see a high CAGR for the next two years i.e. the market is expected to be at $7.03 billion in 2011 with a CAGR of 222.4% from 2009 to 2011. However, the very high CAGR will settle down by 2012 to 30% for the period of 2009 to 2012. The reason for the sudden settle down of the growth is that it is expected that most of the world population will be immunized by the end of 2011.

Market estimates and forecast

* This report will enable strategic understanding and opportunities in the H1N1 2009 influenza vaccines market. The report covers the following market segments.
* Vaccines Markets: Intramuscular Vaccines and Intranasal vaccines.
* Geography Markets: North America, Europe, Asia-Pacific and ROW

Each section of the report offers market data with respect to segments and geography. It also provides market trends with respect to drivers, restraints and opportunities. The report contains strategic section with respect to competitive landscape and market overview. The report will encompass around 15 company profiles.

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Influenza or the common flu is commonly known as `Flu` in most parts of the world. It is infectious and is caused by a virus called RNA. It belongs to the family of Orthomyxoviridae and affects birds and mammals.

The commonest indicators of this disease are chills, sore throat, fever, muscle pains, coughing, severe headache, general weakness and discomfort. In its severe form, influenza can also cause pneumonia and this can prove to be fatal, especially for those who are young and also the elderly. Influenza can also lead to nausea which may lead to vomiting in children, though these are symptoms in case of `stomach flu` only.

As a general rule, influenza is spread by air through a patient`s coughs and sneezes, which creates aerosols holding the virus. Bird flu can also spread due to bird droppings, saliva, feces, nasal secretions or blood. A person can get infected by coming in close contact with these bodily fluids or through contact with polluted surfaces. Most infections are a result of airborne aerosols, though which form of spread is most deadly is not completely clear till now. Common flu viruses are easily inactivated using detergents, disinfectants and sunlight.

Common flu spreads all over the world as seasonal epidemics, and results in thousands of deaths annually, sometimes the figure may touch the million mark too in a pandemic year. During the 20th century itself, 3 influenza pandemics occurred and millions of people died due to it. Each of the pandemic was a result of a unique species of virus in the humans. This generally happens when a prevalent virus is transmitted to humans from some other animal.

An avian virus by the name of H5N1 did ring an alarm bell as a new flu pandemic in Asia during the 90s, but till now it hasn`t evolved as a form which can spread easily between two people. Again in April 2009 a new strain of flu has evolved that has merged genes from pig, human, and the deadly bird flu. Dubbed as `swine flu`, it popped up in Mexico, US and also some other nations.

Symptoms of influenza tend to start all of a sudden, just one or two days after catching the infection. In most cases the initial symptoms are chills and a chilly sensation, though fever is also quite common from the early period only. Many people feel so ill and weak that they have to be confined to their beds for several days, with complaints of pains and aches throughout their bodies, especially in backs and legs. Other symptoms of common flu include aches in throat and joints, feeling very cold, fatigue, irritation in eyes or watering of eyes, headache, reddening of eyes, mouth, skin, nose and throat.

According to the WHO, every year tens of millions of people catch the common flu. For most people it is just means missing one week of work but elderly people run a high risk of death due to this. The worldwide death count due to this is nearly a few hundred thousand people. Common flu can affect even perfectly healthy people and at any age. But old people, children and people with chronic medical conditions can develop complications such as bronchitis, pneumonia, sinus or ear infections easily.

All over the world, common flu produces direct costs because of loss in productivity and related medical treatment, and also indirect costs due to preventative measures taken. In US alone it costs about $10 billion per year. Preventative costs can be quite high too. Worldwide governments have to spend billions of. dollars in preparation and planning for a probable avian flu pandemic in terms of drugs and vaccines along with developing disaster exercises and improving strategies on border controls.

Swine Flu pandemic and impact on world stock markets

                                                                             SUNIL KEWALRAMANI

                                                                                     September 12, 2009

The correlation of gamma and ? was used by Wall Street financial engineers to calculate predicted loan “mortality” rates which some believe created the huge trouble in the securitization business (CDO, CLO, CPDO, SIV). It is interesting to note that the entire mathematical theory was lifted from epidemiology, i.e. the study of how communicative viral diseases spread.  Ironically, both securitization and swine flu pandemic are a matter of grave concern to the world today.

The provisional conclusion is that this latest pandemic is “moderate”: less severe than the 1918 Spanish flu, more in line with that of 1957, and perhaps up to four times as dangerous as a typical seasonal flu virus, which each year kills an estimated 500,000 people around the world.

In Mexico, which has had 14,800 cases and 138 deaths, swine flu may knock 0.3-0.5 per cent from GDP this year, according to the United Nations Economic Commission for Latin America and Caribbean.  The Ernst & Young Item Club, a forecaster, warns that swine flu could cost the UK up to 3 per cent of GDP this year and 1.7 per cent next. If everything goes reasonably well, the epidemic will probably knock around half a percentage point from World GDP. If things deteriorate, it could cause a 1.3 to 1.5 per cent drop.

 W.J. McKibbin and A.A. Sidorenko’s 2006 research paper on The Global Macro-Economic Consequences of Pandemic Influenza finds that “even a mild pandemic has significant consequences for global economic output”, costing close to 0.8 % of World GDP. World Bank estimates that the negative impact on GDP in South Asia as a result of the pandemic will be 0.6 %, if the epidemic is mild.

Pandemics compared – from the Spanish Flu to SARS.

The Spanish Flu unfolded in two waves over 1918-1919, killing  around 50 million people worldwide. An estimated 10-17 million died in India alone, contributing to a steep drop in economic activity. According to economic historian Angus Maddison, India’s GDP declined by 12.8 % in 1918.

  The Asian Flu of 1957-1958 also unfolded in 2 waves, killing 1-2 million people world wide. The SARS outbreak was mercifully less severe, lasting only several months and claiming an estimated 774 lives.  As traumatic as SARS was in terms of its human impact, the markets scarcely reacted to it.

The 1918 Spanish influenza pandemic, which killed tens of millions, descended with devastating virulence on a world ravaged by four years of war. The swine flu pandemic of 2009, by comparison, is arriving when the world is largely at peace but when the global economy is most vulnerable and what appears as green shoots could wither at any time.

Impact of SARS on the Asian economies :  Tourism (visitor arrivals) and retail spending growth dipped sharply into negative for 1-2 quarters during the SARS outbreak. The IMF estimated that East and Southeast Asia lost almost USD 18bn in demand and business revenue due to SARS.  At the height of the SARS panic in February 2003, Singapore and Hong Kong reported month/month declines in retail sales of -35% and -27.5% respectively.  In Hong Kong, retail sales in year/year terms did not return to positive growth until August 2003.   In response, Asian governments put together relief packages to prevent and contain the problem as well as to help businesses with cash flow problems. Malaysia, for instance, spent an additional 2% of GDP in May 2003.   Hong Kong and Taiwan spent roughly 1% and 0.5% respectively on similar aid packages.
 
Impact on equity markets

Despite the widespread social and human impact of SARS, there was scarcely detectable impact on the stock market recovery in 2003. Asian ex-Japan equities (using the MSCI Asia Pacific ex-Japan as a proxy) continued on their recovery off the lows of 2003 (please see chart below).  

Exhibit: MSCI Asia Pacific ex-Japan during SARS outbreak

… please find chart on next page …

To be sure, there are significant differences this time around – the global economy is clearly in a weaker state today than in 2003. The markets for risk assets are clearly more vulnerable today than in 2003. There is that crucial unknown – is this outbreak going to develop into a pandemic more severe than SARS in 2003 or resemble the 1918 Spanish Flu ?

I have done a worst-case scenario analysis to determine the impact the swine flu can have on world equity markets, by looking at past precedence.

1918 Spanish Flu and the Market

The 1918 Spanish Flu was a global flu pandemic that affected nearly half of the world’s population at the time (or up to one billion people).  The 1918 outbreak was the worst of the 20th century, and it fell under the H1N1 virus subtype, which is the same subtype as the current swine flu outbreak.  It’s estimated that the 1918 flu killed anywhere from 20 million to 100 million people, which would have equaled a mortality rate of 2.5%-5% of those infected.

Below is a chart on the 1918 Influenza that highlights deaths per 1,000 people infected with influenza and/or pneumonia, and overlayed is a chart of the Dow Jones Industrial Average.  There were three pandemic waves from 1918-1919, with the worst coming from October to December of 1918.  Following the first pandemic wave, the market sold off a little bit, but then rallied during the summer months before topping out prior to the second wave.  The market trended downward during the worst wave of the flu outbreak, but it only went down 10.9% from peak to trough, and then it rallied significantly during and following the third wave.  World War I was also coming to an end in late 1918, so the end of the pandemic and the war probably contributed to the subsequent rally in stocks.

The correlation between economic recession and a pandemic appears to be quite high. The last economic crisis hit in 2001 with the dot com and telecom bubble burst and that was instantly followed by 9/11 and then the SARS crisis in South East Asia and the Anthrax cases in USA.

As you can see in the chart of the MSCI World Stock Index below, there are similarities between the 2003 SARS epidemic and today’s flu outbreak.

 Source : www.socioeconomics.net

Below is a chart of Asian bird flu outbreaks plotted against the prices of Hong Kong’s Hang Seng stock index, a measure of Asia’s social mood.  As one can see, bird flu outbreaks have occurred during downturns in the stock market:

Source : Elliott Wave

So, is it a coincidence that the first cases of swine flu in Mexico were reported in early March, when global stock markets were hitting lows they hadn’t seen in years or decades?

If swine flu plays out like the SARS outbreak of 2003, the market’s focus is likely to remain on how the world will return into growth trajectory. And if this outbreak appears to be one that can be contained in a few months, the market is going to remain more focused on how Chinese and India growth story can save the world from a deep recession.  Or whether there is an Asian bubble in the making.

Sunil Kewalramani is a Wharton Business School MBA and Chief Investment Officer, Global Money Investor

What is swine flu?

Swine flu is a highly contagious acute respiratory disease found in pigs. It is caused by one of the swine influenza A viruses. Swine flu results in high morbidity and low mortality of about 1-4%. Amongst the pigs themselves, the virus spreads through aerosols, direct and indirect contact, and through asymptomatic carrier pigs. Although the pigs are prone to regular infections, incidences increase in the fall and winter months in the temperate zones. Therefore, pigs are routinely vaccinated against swine influenza in many countries.

Swine influenza viruses though commonly belong to the H1N1 subtype, other subtypes like H1N2, H3N1, H3N2 are also known to be circulating in pigs. Pigs, on the other hand, are more susceptible to being infected with avian influenza viruses, human seasonal influenza viruses and swine influenza viruses, allowing the genes from the viruses to mix and result in an influenza virus containing genes from a number of sources; this is called a “reassortant” virus. Although swine influenza viruses are species specific, they can in extreme conditions make a crossover to cause disease in humans.

How is swine flu diagnosed?

When a person is under the weather, many symptoms may be present. However, symptoms of swine flu are very similar to normal cold and flu symptoms, and may include:

• Headache
• Fever
• Cough
• Appetite loss
• Fatigue
• Sore throat
• Runny nose
• Chills
• Nausea
• Vomiting
• Diarrhea

Fatigue, appetite loss and diarrhea can be dangerous. If the symptoms are persistent, it becomes imperative that you see a doctor. In order to diagnose your illness, the doctor may order:

• Chest x-rays
• Respiratory specimen
• Blood work

To diagnose swine influenza A infection, a respiratory specimen must be collected within the first 4 to 5 days of the onset of the illness as this is the time when the infected person is most likely to be shedding virus; however, children especially, may be shedding the virus for 7 days or longer. In order to identify the swine influenza A virus, the specimen must be sent to the CDC for laboratory testing. Only RT-PCR or viral culture has the potential to confirm infection with swine-origin influenza A (H1N1) virus. The test performance of rapid antigen tests and immunofluorescence tests for detection of swine-origin influenza A (H1N1) virus is unknown. Persons who are suspected of having swine-origin influenza A (H1N1) virus and who test positive for the same using one of these tests should then have confirmatory RT-PCR or viral culture testing to confirm the presence of swine-origin influenza A (H1N1) virus. A negative rapid antigen or immunofluorescence test cannot be used to rule out swine-origin influenza A (H1N1) virus infection. The results of this test from nasopharyngeal or nasal swab, along with other information, will in all probability help your doctor take better care of you. Knowing the test results will help prevent the spread of the virus to others.

The Swine Influenza Test Kit is a sensitive test to detect the swine flu virus; however, the FDA has not cleared or approved this test. But it has been agreed by the FDA has agreed that this test can be used under an Emergency Use Authorization.

How is swine flu different from bird flu?

The swine flu and the bird flu viruses do not have a twin-like similarity but are however quite similar. The virus that causes bird flu in humans first mutated from a virus that birds had so that it could then be passed on to humans; once established, it now passes from human to human contact. Same is the case with swine flu. It started among pigs as a virus but then soon mutated to spread to humans. Viruses have the ability to replicate rapidly; these viruses are able to mutate very quickly thereby creating new strains that then move on to multiply in other areas and susceptible hosts. Avian flu so far has found it difficult to infect humans unless they were exposed to birds intensely. This is because the virus has not mutated in a way that makes it transmissible by one human to another. However, the swine flu virus has genetic origins from both pigs and birds. The biggest difference here is that the swine flu virus has mutated to an extent where it can readily be transmitted on human to human contact.

What drugs are available to treat swine flu and bird flu?

Antiviral treatment is normally the first line of treatment for the confirmed, probable or suspected cases of swine-origin influenza A (H1N1) virus infection, prioritizing treatment of hospitalized patients and patients with high risk for complications. Antiviral drugs are prescription medicines (pills, liquid or an inhaler) with actively works against influenza viruses, including the swine influenza virus. Antiviral drugs are generally used to treat swine flu or to prevent infection with swine flu viruses. These medications are prescribed by a health care professional.

As of today, four influenza antiviral drugs are approved for use in the United States. They are:

• Oseltamivir (Tamiflu)
• Zanamivir (Relenza)
• Amantadine
• Rimantadine (Flumadine)

Laboratory testing conducted on the swine influenza A (H1N1) viruses so far has indicated that the viruses are susceptible (sensitive) to oseltamivir and zanamivir. Antiviral drugs can make the illness milder as well prevent serious influenza complications. However, these antiviral drugs work best when they are started within two days of the onset of the illness. Antiviral drugs can also be used as a preventive measure to protect a person who has been or may be near a person with swine flu. Antiviral drugs are about 70% to 90% effective in preventing the flu.

Antiviral doses recommended for treatment of swine-origin influenza A (H1N1) virus infection in adults or children 1 year of age or older are the same as those recommended for seasonal influenza. Oseltamivir use in children less than 1 year of age was recently approved by the U.S. FDA under an Emergency Use Authorization (EUA).

Moreover, there are vaccines available that can be given to pigs to prevent swine influenza from spreading. Nonetheless, there is no vaccine to protect humans from swine flu yet. It is believed that the seasonal influenza vaccine will likely help provide partial protection against swine H3N2, but not swine H1N1 viruses.