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Exclusive Life Science Feature According to Tadataka (Tachi) Yamada, M.D., Takeda's chief medical and scientific officer (CMSO), the answer lies first in advancing Takeda's very strong late-stage pipeline and second in developing a successful vaccine business that has the potential to be commercially attractive while at the same time creating low-cost health solutions (i.e. vaccines) for some of the poorest countries in the world (i.e. emerging markets). Yamada, who previously served as the president of the Bill and Melinda Gates Foundation global health program (2006 to 2011), explains why vaccines play a pivotal part in making Takeda a truly global pharmaceutical business, and how the company is building its vaccine franchise in order to do so. THE STRONG BUSINESS CASE FOR VACCINES "We are not in the business solely to make money or to make a return on investment for our shareholders," Yamada says. "Certainly we have to do that. But if we forget we are in the business of helping people with unmet medical needs, we are going to fail." That mindset was first honed in Yamada while he was in medical school and then was rekindled during his tenure at the Gates Foundation. He brought this mindset with him to Takeda, as well as the business case as to why creating a global vaccine franchise makes sense. Indeed, the vaccine market is in a significant growth mode. In 2002 the global vaccine market was approximately $5.7 billion, but today it is near $27 billion and expected to increase at a compound annual rate of 10.3 percent through 2015. Vaccines represent very low-cost health solutions which pre- 26 LifeScienceLeader.com August 2013 vent disease. The measles vaccine costs about six cents. WHO estimates global immunization campaigns save more than 2.5 million lives every year, and protect millions more from disease and disability. "From a business standpoint, vaccine development is a great investment," states Yamada. "For a pharmaceutical company, it presents a product line which is not as dependent upon the life cycle of intellectual property as most small molecules. It is very difficult to create a generic vaccine without doing a set of clinical studies to prove it has the same human response as the branded vaccine." Yamada believes the need to conduct clinical trials to gain approval of a generic vaccine provides companies with better IP protection, serving as a barrier to entry by smaller generic companies. However, because vaccines are developed from biological organisms, they can be harder to work with, are "From a business standpoint, less predictable than their vaccine development is a great chemical counterparts, and investment," says Tadataka (Tachi) Yamada, M.D., chief medical and thus, have to be tested in scientific officer at Takeda. more people before being licensed. As a result, it can take 15 years or more to develop a vaccine, and at an estimated cost between $163 million and $518 million. Once developed, their biological nature makes them more difficult to consistently manufacture on a commercial scale. Another challenge revolves around the shipping and storage of vaccines. For example, temperatures for refrigerated and frozen vaccines need to be maintained between 2° C and 8° C and -50° C and -15° C. These challenges aside, for big pharmaceutical companies the vaccine business remains a very worthwhile investment. Consider this: Of the 10 bestselling vaccines presently on the market, all are produced by five Big Pharmas — GSK, Merck, Novartis, Pfizer, and Sanofi. Total sales of the Top 10 are nearly $6 billion, with Pfizer's Prevnar 13 (pneumococcal vaccine) topping the list. Available in 120 countries, and with sales totaling $3.72 billion in 2012, Prevnar 13 accounts for nearly 14 percent of the total vaccine pie. Merck's chicken pox vaccine, VARIVAX, first received FDA approval in 1995, and still generates $392 million in annual sales. THE VACCINE VISION For Yamada, creating a global vaccine business first involved devel-