ABOUT DATAMONITOR HEALTHCARE 2
About the Infectious diseases pharmaceutical analysis team 2

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
Wyeth's Prevnar and Merck & Co's Gardasil have both reached blockbuster status 30
Snapshot of other important vaccines players 31
AstraZeneca: holding on to MedImmune's 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 Idera's TLR7, 8, 9 adjuvant candidates for use in vaccines against oncology, infectious diseases and Alzheimer's disease 86
Research collaboration with Iomai regarding Iomai's transdermal patch delivery technology 87
Grants and government contracts 87
Strategic outlook 88
Strengths: Merck & Co's strong portfolio of novel, high-price vaccines will continue to provide large vaccine revenues 89
Weaknesses: late-stage failures have thinned Merck & Co's vaccine pipeline 89
Opportunities: further geographic expansion of Merck & Co's 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-Dickinson's 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: Menactra's 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 MedImmune's 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: FDA's 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 Alzheimer's disease 206
M&A, public-private partnerships 207
Equity Investment in Alphavax 208
Technology deals 208
In-licensing of Inhibitex's MSCRAMM (Microbial Surface Components Recognizing Adhesive Matrix Molecules) protein technology 210
Inlicensing of Inovio's 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 (Alzheimer's 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 Intercell's 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, Novartis's 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
About Datamonitor 264
About Datamonitor Healthcare 264
About the Infectious Diseases analysis team 265
Key therapy team members 266
Holger Rovini, Head of Respiratory and Infectious Diseases 266
Hedwig Kresse, Senior Analyst, Infectious Diseases 266
Disclaimer 267

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