One Step Closer To A Malaria Vaccine

BMI View : Communicable diseases will remain a significant health burden over the next two decades forcing companies to adopt low-price, high-volume business models as the burden is overwhelmingly concentrated in low income countries. This will continue to limit revenue earning opportunities for companies whose product portfolios contain medicines for the treatment of long-term diseases.

Multinational drugmaker GlaxoSmithKline is to seek marketing approval for the world's first malaria vaccine. Results from a large-scale phase III trial show that the most clinically advanced malaria vaccine candidate, RTS,S, continued to protect young children and infants from clinical malaria up to 18 months after vaccination. Based on this data, GSK now intends to submit, in 2014, a regulatory application to the European Medicines Agency (EMA).

GSK has been conducting clinical trials for the vaccine in eleven African research centres in seven African countries, in conjunction with, the PATH Malaria Vaccine Initiative (MVI), with grant funding from the Bill & Melinda Gates Foundation to MVI.

Dominated By Africa
Estimated Malaria Cases

BMI View : Communicable diseases will remain a significant health burden over the next two decades forcing companies to adopt low-price, high-volume business models as the burden is overwhelmingly concentrated in low income countries. This will continue to limit revenue earning opportunities for companies whose product portfolios contain medicines for the treatment of long-term diseases.

Multinational drugmaker GlaxoSmithKline is to seek marketing approval for the world's first malaria vaccine. Results from a large-scale phase III trial show that the most clinically advanced malaria vaccine candidate, RTS,S, continued to protect young children and infants from clinical malaria up to 18 months after vaccination. Based on this data, GSK now intends to submit, in 2014, a regulatory application to the European Medicines Agency (EMA).

GSK has been conducting clinical trials for the vaccine in eleven African research centres in seven African countries, in conjunction with, the PATH Malaria Vaccine Initiative (MVI), with grant funding from the Bill & Melinda Gates Foundation to MVI.

Dominated By Africa
Estimated Malaria Cases

There Is An Unmet Demand For The Vaccine

The World Health Organization (WHO) has indicated that a policy recommendation for the RTS,S malaria vaccine candidate is possible as early as 2015 - if it is granted a positive scientific opinion by EMA.

  • 3.3bn people (half the world's population) live in areas at risk of malaria transmission in 106 countries and territories

  • In 2010, malaria caused an estimated 216mn clinical episodes and 655,000 deaths.

  • In 2010, an estimated 91% of deaths were in the African Region, followed by 6% in the South-East Asian Region and 3% in the Eastern Mediterranean Region (3%).

  • In 2010, about 86% of deaths globally were in children.

Africa: Highest Number Of Deaths
Estimated Malaria Deaths

How Will This Impact GSK's Financials?

If approved, the vaccine is unlikely to significantly impact GSK's bottom line - despite the high demand for RTS,S. GSK has promised that if the vaccine is given the market go-ahead, it will be priced at the cost of manufacturing plus a 5% margin. The margin will then be reinvested in malaria research.

BMI believes GSK's decision to not price the vaccine at a premium is an advisable business strategy. Africa, which clearly demonstrates the highest demand for the vaccine, is characterised by low-income populations where only a minority of the citizens have access to adequate healthcare. Drugs are therefore widely unaffordable. We believe that in addition to realising immediate (even if minor) financial gains, this strategy will ultimately enable GSK to build upon its emerging markets presence - increased corporate public responsibility towards increasing medicines access to those in developing states on low incomes will be positive for the company's public relations.

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Sector: Pharmaceuticals & Healthcare
Geography: Global
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