Contents:

CHAPTER 1 EXECUTIVE SUMMARY 3 Strategic scoping and focus 3 Datamonitor insight into the disease market 3 Related reports 8 CHAPTER 2 MARKET DEFINITION 10 Market definition for this report 10 CHAPTER 3 MARKET OVERVIEW 12 Summary 12 Vaccines have emerged as key revenue drivers for Big Pharma 13 The emergence of new technologies has increased the possibilities for vaccine development 13 The success stories of Prevnar and Gardasil fuel hopes for further vaccine blockbusters 15 New legislation in the US has decreased the risks of litigation for vaccine manufacturers 18 The high entry hurdles for generics manufacturers make vaccines an attractive sector in times of the decline of the traditional blockbuster model 20 Upholding the strong growth of the vaccine sector as a whole will be the key challenge in the coming decade 23 Current market assessment 24 Five big companies dominate the vaccines market 24 The global vaccine market is growing very fast and the importance of vaccines for pharmaceutical portfolios is increasing 25 Over the last four years, approvals of novel vaccines as well as consolidation have shaped the global vaccine market 28 The US remain the main market for vaccines in 2007 29 Wyeths Prevnar and Merck & Cos Gardasil have both reached blockbuster status 30 Snapshot of other important vaccines players 31 AstraZeneca: holding on to MedImmunes heritage? 33 Bavarian Nordic: niche player in biodefense 33 Baxter - strong manufacturing capacity as key opportunity 33 CSL: controlling the Australian vaccines market 34 Crucell: attractive dual business model 35 Emergent BioSolutions: focusing on biodefense 35 Intercell: the multi-partner company 36 Pfizer: building on DNA vaccines and adjuvants 37 Solvay: influenza as key focus 37 Opportunities and threats 38 Opportunities 39 Development of vaccines for novel indications 39 Development of new technologies 41 Expansion to emerging and developing markets 41 Increasing awareness and "disease marketing" 43 Threats 44 Cost containment 44 Regulatory requirement for increasingly large trials increases upfront investments and development times 45 Low-cost manufacturers from emerging markets could shake up the sector and undercut prices 46 Negative publicity and public scares through anti-vaccination activists 48 CHAPTER 4 MERCK & CO - THE INNOVATOR 51 Summary 51 Strategic overview 52 History of vaccines division 52 Sales performance 55 Geographic spread 56 Seasonality 57 Role of vaccines in overall company portfolio 58 Portfolio analysis 60 Gardasil 61 RotaTeq 64 Zostavax 66 Hepatitis franchise 68 Other viral vaccines 70 Other vaccines 71 Pipeline analysis 73 Heplisav 76 V710 78 V503 79 V419 79 V950 80 Deals and alliances 80 Product deals 81 In-licensing of Heplisav from Dynavax Technologies 83 Collaboration with Intercell regarding staphylococcal vaccines 83 In-licensing of Gardasil from CSL 84 Development collaborations with PATH and the Indian Council of Medical Research 84 M&A, distribution and marketing agreements 85 Technology deals 85 In-licensing of Ideras TLR7, 8, 9 adjuvant candidates for use in vaccines against oncology, infectious diseases and Alzheimers disease 86 Research collaboration with Iomai regarding Iomais transdermal patch delivery technology 87 Grants and government contracts 87 Strategic outlook 88 Strengths: Merck & Cos strong portfolio of novel, high-price vaccines will continue to provide large vaccine revenues 89 Weaknesses: late-stage failures have thinned Merck & Cos vaccine pipeline 89 Opportunities: further geographic expansion of Merck & Cos novel vaccines portfolio could result in substantial revenue increases 91 Threats: competition for RotaTeq and Gardasil is emerging 92 CHAPTER 5 SANOFI PASTEUR - THE CUSTOMIZER 93 Summary 93 Strategic overview 94 History of vaccines division 94 Sales performance 98 Seasonality 99 Role of vaccines in overall company portfolio 99 Portfolio analysis 101 Influenza vaccine franchise 102 Pediatric combination franchise 105 Adult/adolescent booster franchise 109 Meningitis/pneumonia franchise 111 Travel, endemic, MMR vaccine franchise 114 Other vaccines 116 Pipeline analysis 118 Influenza 123 Pediatric and adolescent combination vaccines 124 Meningitis/pneumonia 125 Travelers and endemic vaccines 126 Other vaccines 128 Deals and alliances 130 Product deals 130 Licensing agreement with Crucell regarding cell-based influenza vaccines and related technical services agreement with Lonza 133 Manufacturing and supply agreement with M.P. Chumakov Institute of Poliomyelitis and Virus Encephalitides regarding polio vaccine for Russia 133 Research and license agreement with Statens Serum Institut regarding tuberculosis vaccine candidate 133 M&A, distribution and marketing agreements 134 Acquisition of Acambis 135 Joint venture with Daiichi Sankyo for the Japanese market 136 Technology deals 136 Licensing of Becton-Dickinsons micro-delivery technology 139 Grants and government contracts 139 Strategic outlook 141 Strengths: ongoing leadership in important flu and pediatric combination sectors 142 Weaknesses: focus on follow-on has resulted in lack of innovation 143 Opportunities: hidden pipeline gems with blockbuster potential 144 Threats: Menactras monopoly expected to fall 144 CHAPTER 6 GLAXOSMITHKLINE - THE ALL-ROUNDER 146 Summary 146 Strategic overview 147 History of vaccine division 147 Sales performance 150 Geographic spread 151 Seasonality 152 Role of vaccines in overall company portfolio 153 Portfolio analysis 155 Infanrix franchise 156 Hepatitis franchise 159 Influenza franchise 160 Cervarix 163 Rotarix 165 Other vaccines 166 Pipeline analysis 167 Meningitis 170 Pneumococcal disease 171 Influenza 171 Travel vaccines and tuberculosis 172 Cancer 172 Deals and alliances 173 Product deals 173 In-licensing of two Alzheimer vaccine candidates from Affiris 175 In-licensing of MAGE-A3 and other tumor antigens from the Ludwig Institute of Cancer Research 175 In-licensing of meningitis antigens and IP from Imclone 175 In-licensing of Rotarix from AVANT Immunotherapeutics 176 Strategic alliance with MedImmune for the development of Cervarix 176 M&A, public-private partnerships, distribution and marketing agreements 176 Acquisition of ID Biomedical 179 Acquisition of Corixa Corporation 180 Promotion Service Agreement with Sinovac Biotech and establishment of an exclusive cooperation agreement with Shenzhen Neptunus Interlong Bio-Technique Co. Ltd. (NIBT) 180 Technology deals 181 Licensing of MedImmunes reverse genetics technology for influenza 183 Grants and government contracts 183 Strategic outlook 184 Strengths: commercializing on a continuing strong portfolio 186 Weaknesses: suboptimal US penetration constitutes major revenue limitation 186 Opportunities: strong pipeline to drive future revenues 187 Threats: FDAs attitude towards novel adjuvants unlikely to change soon 188 CHAPTER 7 WYETH - THE ONE HIT WONDER 190 Summary 190 Strategic overview 191 History of vaccines division 191 Sales performance 193 Geographic spread 194 Seasonality 195 Role of vaccines in overall company portfolio 196 Portfolio analysis 198 Prevnar 199 Pipeline analysis 201 Prevnar 13 203 ACC-001 204 MnB rLP2086 204 Deals and alliances 205 Product deals 205 License agreement with RIVM for meningitis B vaccine 206 Alliance with Elan for development of new drugs to treat Alzheimers disease 206 M&A, public-private partnerships 207 Equity Investment in Alphavax 208 Technology deals 208 In-licensing of Inhibitexs MSCRAMM (Microbial Surface Components Recognizing Adhesive Matrix Molecules) protein technology 210 Inlicensing of Inovios DNA delivery technology 210 Grants and government contracts 210 Strategic outlook 211 Strengths: Wyeth will continue to dominate the pneumococcal vaccine market 212 Weaknesses: strong reliance on Prevnar franchise as sole revenue generator 213 Opportunities: strong focus on new geographies and target groups 214 Threats: emerging competitors in key revenue sectors 214 CHAPTER 8 NOVARTIS - THE NEWCOMER 216 Summary 216 Strategic overview 217 History of vaccines division 217 Sales performance 220 Geographic spread 221 Seasonality 222 Role of vaccines in overall company portfolio 223 Portfolio analysis 224 Influenza vaccine franchise 225 Travel vaccine franchise 227 Meningitis vaccines 228 Pediatric/adult DTP/polio/Hib vaccines 229 Pipeline analysis 230 Meningitis 234 Influenza 235 Novel therapeutic vaccines 236 CAD106 (Alzheimers disease, Phase II) 236 Nic002 (nicotine dependence, Phase II) 236 Others 237 Deals and alliances 238 Product deals 238 Strategic partnership with Intercell 241 Marketing and distribution agreement for Intercells Ixiaro 241 In-licensing of CAD106 and Nic002 from Cytos Biotechnology 242 M&A, distribution and marketing agreements 242 Acquisition of Chiron 244 Acquisition of PowderJect and Spin-off of PowderMed by Chiron 245 Divestment of SBL Vaccin AB 246 Technology deals 246 Grants and government contracts 247 Strategic outlook 249 Strengths: Novartis has a strong influenza portfolio and excellent science 250 Weaknesses: two years after the acquisition of Chiron, Novartiss vaccine division is still fragmented 251 Opportunities: Menveo and Men B as potential blockbusters 251 Threats: competition in the meningitis space is fierce 252 BIBLIOGRAPHY 253 Company financial reports 253 Merck & Co 253 Sanofi Pasteur 253 GlaxoSmithKline 253 Wyeth 254 Novartis 254 Further literature 254 APPENDIX 263 Contributing experts 263 Report methodology 263 List of Tables Table 1: Vaccine sales and growth rates of the top five vaccine manufacturers, 2004-9M2008 26 Table 2: Sales breakdown of the four best-selling vaccines, 2004-9M 2008 31 Table 3: Recent key mergers and acquisitions in the vaccines industry, December 2008 32 Table 4: Summary of opportunities and threats in the vaccines market, 2008 39 Table 5: Merck & Co - vaccine portfolio overview, December 2008 61 Table 6: Merck & Co - Gardasil product overview 62 Table 7: Merck & Co - RotaTeq product overview 64 Table 8: Merck & Co - Zostavax product overview 66 Table 9: Merck & Co - hepatitis franchise product overview 68 Table 10: Merck & Co - other viral vaccines product overview 70 Table 11: Merck & Co - other vaccines product overview 72 Table 12: Merck & Co - vaccine pipeline overview, December 2008 74 Table 13: Merck & Co - key vaccine product deals, December 2008 82 Table 14: Merck & Co - Vaccine joint venture with Sanofi Pasteur 85 Table 15: Merck & Co - key vaccine technology deals, December 2008 86 Table 16: Merck & Co vaccines - SWOT analysis, December 2008 88 Table 17: Sanofi Pasteur - vaccine portfolio overview, December 2008 102 Table 18: Sanofi Pasteur - influenza vaccine franchise product overview 103 Table 19: Sanofi Pasteur - pediatric combination vaccine franchise key product overview 107 Table 20: Sanofi Pasteur - booster vaccine franchise product overview 110 Table 21: Sanofi Pasteur - meningitis/pneumonia vaccine franchise product overview 112 Table 22: Sanofi Pasteur - traveler/endemic vaccine franchise product overview 115 Table 23: Sanofi Pasteur - vaccine pipeline overview, December 2008 119 Table 24: Sanofi Pasteur - Key vaccine product deals (1); December 2008 131 Table 25: Sanofi Pasteur - Key vaccine product deals (2); December 2008 132 Table 26: Sanofi Pasteur - key vaccine M&A, public-private partnerships, distribution/marketing agreements, December 2008 135 Table 27: Sanofi Pasteur - key vaccine technology deals, December 2008 138 Table 28: Sanofi Pasteur - key grants and government contracts for vaccines, December 2008 140 Table 29: Sanofi Pasteur - SWOT analysis, December 2008 142 Table 30: GlaxoSmithKline - vaccine portfolio overview, December 2008 156 Table 31: GlaxoSmithKline - Infanrix franchise product overview 157 Table 32: GlaxoSmithKline - DTP adolescent booster product overview 157 Table 33: GlaxoSmithKline - hepatitis franchise product overview 159 Table 34: GlaxoSmithKline - influenza vaccine franchise product overview 162 Table 35: GlaxoSmithKline - other vaccines, overview 167 Table 36: GlaxoSmithKline - vaccine pipeline overview, December 2008 168 Table 37: GlaxoSmithKline - key vaccine product deals; December 2008 174 Table 38: GlaxoSmithKline - key vaccine M&A, public-private partnerships, distribution/marketing agreements, December 2008 178 Table 39: GlaxoSmithKline - key vaccine technology deals, December 2008 182 Table 40: GlaxoSmithKline - key grants and government contracts for vaccines, December 2008 184 Table 41: GlaxoSmithKline vaccines - SWOT analysis, December 2008 185 Table 42: Wyeth - vaccines pipeline, December 2008 202 Table 43: Wyeth - key vaccine product deals, December 2008 206 Table 44: Wyeth - key vaccine M&A, public-private partnerships, distribution/marketing agreements, December 2008 208 Table 45: Wyeth - key vaccine technology deals, December 2008 209 Table 46: Wyeth - key grants and government contracts for vaccines, December 2008 211 Table 47: Wyeth vaccines - SWOT analysis, December 2008 212 Table 48: Novartis - vaccine portfolio overview; December 2008 225 Table 49: Novartis - Influenza vaccine franchise product overview 226 Table 50: Novartis - travel vaccine franchise key product overview 227 Table 51: Novartis - meningococcal vaccine franchise product overview 228 Table 52: Novartis - clinical vaccine pipeline overview, December 2008 231 Table 53: Novartis - key vaccine product deals, December 2008 240 Table 54: Novartis - key vaccine M&A, public-private partnerships, distribution/marketing agreements, December 2008 244 Table 55: Novartis - key vaccine technology deals, December 2008 247 Table 56: Novartis - key grants and government contracts for vaccines, December 2008 248 Table 57: Novartis - SWOT analysis, December 2008 249 List of Figures Figure 1: Comparison of IMS-reported versus company-reported global sales data for vaccines, 2007 10 Figure 2: Prevnar: global sales 2001-9M2008 16 Figure 3: Gardasil: sales 2004-9M2008 17 Figure 4: National Vaccine Injury Compensation Program - petition and award statistics, 1990-2008 20 Figure 5: Comparison of lifecycles of pharmaceuticals and vaccines 22 Figure 6: Market growth cycle for vaccines 23 Figure 7: Market shares of the five key vaccine players in total vaccine sales, 2004 versus 2007 24 Figure 8: Combined vaccine sales of the top five vaccine manufacturers, 2004-9M2008 25 Figure 9: Vaccines versus overall pharmaceutical sales, 2007 27 Figure 10: Vaccine sales as share of overall company pharmaceutical sales, 2004-9M2008 28 Figure 11: Key events impacting the vaccines market, 2004-08 29 Figure 12: 2007 vaccine sales of Merck & Co, GlaxoSmithKline, Wyeth, Novartis and Sanofi Pasteur MSD by geography 30 Figure 13: Share of leading vaccines on a product basis, 2004-2007 31 Figure 14: Birth cohort sizes - seven major markets versus BRIC countries 42 Figure 15: Possible strategies for penetration of emerging markets 43 Figure 16: Public sector costs of routine childhood immunization per child, US, 1975-2008 44 Figure 17: Number of enrolled patients in Phase III trials for selected vaccines 46 Figure 18: Presence of local/regional vaccine manufacturers in emerging geographies 47 Figure 19: Reported measles cases and MMR vaccination coverage in England, 1996--2007 49 Figure 20: Merck & Co - vaccines pedigree, 2008 54 Figure 21: Merck & Co - total vaccine sales, 2004-2008; Q1-Q3 56 Figure 22: Merck & Co vaccine sales - geographic spread, 2004-9M2008 57 Figure 23: Merck & Co - total vaccine sales, by quarter, 2006-9M2008 58 Figure 24: Merck & Co - vaccine sales as share of overall company pharmaceutical sales, 2004-9M2008 59 Figure 25: Merck & Co - vaccines versus overall pharmaceutical sales, 2007 60 Figure 26: Merck & Co - Gardasil sales by geography, 2004-9M2008 62 Figure 27: Merck & Co - RotaTeq sales by geography, 2004-9M2008 65 Figure 28: Merck & Co - Zostavax sales by geography, 2004-9M2008 67 Figure 29: Merck & Co - hepatitis franchise sales by geography, 2004-9M2008 69 Figure 30: Merck & Co - other viral vaccines sales by geography, 2004-9M2008 71 Figure 31: Merck & Co - other vaccines sales by geography, 2004-9M2008 73 Figure 32: Merck & Co - overlap between marketed vaccines portfolio and pipeline vaccines, December 2008 75 Figure 33: Merck & Co - clinical vaccines pipeline depth, December 2008 76 Figure 34: Sanofi Pasteur - history of vaccines division 96 Figure 35: Sanofi Pasteur - vaccines pedigree, 2008 97 Figure 36: Sanofi Pasteur - total vaccine sales, 2004-9M 2008 98 Figure 37: Sanofi Pasteur - total vaccine sales, by quarter, 2006-9M2008 99 Figure 38: Sanofi Aventis - vaccine sales as share of overall company pharmaceutical sales, 2004-9M2008 100 Figure 39: Sanofi Aventis - vaccines versus overall pharmaceutical sales, 2007 101 Figure 40: Sanofi Pasteur - influenza vaccine franchise sales, 2004-9M2008 104 Figure 41: Sanofi Pasteur - pediatric combination vaccine franchise sales, 2004-9M2008 108 Figure 42: Sanofi Pasteur - booster vaccine franchise sales, 2004-9M2008 110 Figure 43: Sanofi Pasteur - meningitis/pneumonia vaccine franchise sales, 2004-9M2008 113 Figure 44: Sanofi Pasteur - traveler/endemic vaccine franchise sales, 2004-9M2008 116 Figure 45: Sanofi Pasteur - other vaccine sales, 2004-9M2008 117 Figure 46: Sanofi Pasteur - share of Sanofi Pasteur MSD joint venture sales by vaccine class, 2004-9M2008 118 Figure 47: Sanofi Pasteur - clinical vaccines pipeline depth and breadth, December 2008 121 Figure 48: Sanofi Pasteur - overlap between marketed vaccines portfolio and pipeline vaccines, December 2008 122 Figure 49: GlaxoSmithKline - history of vaccines division 148 Figure 50: GlaxoSmithKline - vaccines pedigree, 2008 149 Figure 51: GlaxoSmithKline - total vaccine sales, 2004-9M2008 151 Figure 52: GlaxoSmithKline vaccine sales - geographic spread, 2004-9M2008 152 Figure 53: GlaxoSmithKline - total vaccine sales, by quarter, 2006-9M2008 153 Figure 54: GlaxoSmithKline - vaccine sales as share of overall company pharmaceutical sales, 2004-9M2008 154 Figure 55: GlaxoSmithKline - vaccines versus overall pharmaceutical sales, 2007 155 Figure 56: GlaxoSmithKline - Infanrix and Boostrix franchise sales by geography, 2004-9M2008 158 Figure 57: GlaxoSmithKline - hepatitis vaccine franchise sales by geography, 2004-9M2008 160 Figure 58: GlaxoSmithKline - influenza vaccine franchise sales by geography, 2004-9M2008 163 Figure 59: GlaxoSmithKline - Cervarix sales by geography, 2004-9M2008 164 Figure 60: GlaxoSmithKline - Rotarix sales by geography, 2004-9M2008 166 Figure 61: GlaxoSmithKline - overlap between marketed vaccines portfolio and pipeline vaccines, December 2008 169 Figure 62: GlaxoSmithKline - clinical vaccines pipeline depth and breadth, December 2008 170 Figure 63: GlaxoSmithKline vaccines pipeline - adjuvanted versus non-adjuvanted candidates, December 2008 188 Figure 64: Wyeth - vaccines pedigree, 2008 192 Figure 65: Wyeth - total vaccine sales (Prevnar), 2004-9M2008 193 Figure 66: Wyeth vaccine sales (Prevnar) - geographic spread, 2004-9M2008 195 Figure 67: Wyeth - total vaccine sales (Prevnar), by quarter, 2006-9M2008 196 Figure 68: Wyeth - vaccine sales (Prevnar) as share of overall company pharmaceutical sales, 2004-9M2008 197 Figure 69: Wyeth - vaccines (Prevnar) versus overall pharmaceutical sales, 2007 198 Figure 70: Wyeth - Prevnar sales by geography, 2004-9M2008 200 Figure 71: Wyeth - overlap between marketed vaccines portfolio and pipeline vaccines, December 2008 202 Figure 72: Novartis - history of vaccines division 218 Figure 73: Novartis - vaccines pedigree, 2008 219 Figure 74: Novartis- total vaccine sales, 2004-9M2008 221 Figure 75: Novartis vaccines and diagnostics sales - geographic spread, 2004-9M2008 222 Figure 76: Novartis - total vaccine and diagnostics sales, by quarter, 2006-9M2008 223 Figure 77: Novartis - vaccines and diagnostics sales as share of overall company pharmaceutical sales (excluding consumer health), 2004-9M2008 224 Figure 78: Novartis - overlap between marketed vaccines portfolio and pipeline vaccines 232 Figure 79: Novartis - clinical vaccines pipeline depth and breadth, December 2008 233