IT’S DIFFICULT TO READ a newspaper or watch the TV news without finding some reference to the anticipated avian flu pandemic. Coupled with the pre-existing demand for human influenza prescriptions, it means that sales of Roche’s Tamiflu are soaring. This, in turn, is helping to drive the 13% annual growth that the herpes and respiratory antivirals market has enjoyed since 2000. In 2004, this market generated sales worth $2.2billion.
However, a new report from independent market analyst Datamonitor indicates that in the long term, RSV antivirals and vaccines may emerge to challenge the current heavyweight class, the herpes simplex/varicella zoster (HSV/VZVs) and cytomegalovirus (CMVs) anti-virals.
The dominance of GSK and Roche
The herpes and respiratory antiviral market has been dominated by the European pharma companies GSK, Roche and Novartis, whose combined sales accounted for 86% of this market in 2004. Competition between these players is limited, with GSK dominating the HSV/VZV and Roche the CMV market. Novartis has a modest presence in the HSV/VZV market. However, Novartis could pioneer the respiratory syncytial virus (RSV) antiviral market through the launch of A-60444, a small molecule inhibitor it is developing in collaboration with UK Biotech Arrow Pharmaceuticals.
GlaxoSmithKline, the market leader in both infectious disease (ID) and herpes and respiratory antivirals, first established itself in the HSV/VZV market through the launch of Zovirax (acyclovir) in the UK in 1981. The company suffered a major blow following the drug’s patent expiry in the 1990s, as Zovirax had by then achieved blockbuster status and represented an important source of company revenue. However, these losses were partly offset by the UK launch of the follow-up drug Valtrex (valacyclovir) in 1995. Due to its improved bioavailability, Valtrex has a significantly more convenient dosing regime than its predecessor: it is taken once or twice daily, whereas Zovirax is taken three to five times daily. Datamonitor infectious diseases analyst Dr Brigitte de Lima comments: “Building on the Zovirax legacy and benefiting from GSK’s global presence, Valtrex rapidly ascended to market leadership. In 2004, Valtrex achieved blockbuster status, generating $1billion and accounting for 50% of total herpes and respiratory antiviral sales.”
The impact of effective life cycle management is also reflected by Roche’s achievement and maintenance of market leadership in the CMV market. Roche first gained access to this market when it acquired Syntex – and concomitantly the company’s CMV antiviral, Cytovene (ganciclovir) – in 1994. In a similar way to GSK, Roche largely prevented the sales erosion and generic incursion of ganciclovir following the drug’s patent expiries between 2002 and 2005 in the seven major pharmaceutical markets (UK, US, France, Germany, Italy, Japan and Spain) by launching the follow-up product Valcyte (valganciclovir).
While Valcyte benefits from oral availability for the entire course of treatment and is also associated with higher efficacy, a crucial factor underlying the effective switching of patients from Cytovene to Valcyte was Roche’s heavy promotional expenditure for the latter drug in the months preceding its launch. As a result, its sales have been growing at an average annual rate of 100% since its first launch in 2001, and accounted for an impressive 87% of the CMV market in 2004.
The rise of generic herpes antivirals
Generic incursion in the herpes antiviral market has so far remained low, mainly because few commercially attractive drugs have so far lost patent protection. In 2004, less than 10% of sales were due to unbranded drugs – and 82% of these were accounted for by generic acyclovir, the drug that still enjoys the highest volume use.
In the near future, generic presence is bound to increase significantly with the expected US patent expiries of key HSV/VZV products: Valtrex in 2009 and Famvir (famciclovir) in 2010. Valtrex’s US sales are expected to exceed $1.5 billion in 2008. Based on the effect that patent expiry had on Zovirax sales, Valtrex might lose as much as 85% of its US sales to generics over a threeyear period, says Dr de Lima. “As a consequence, generic market share in the HSV/VZV market is expected to escalate from 10% in 2004 to over 50% in 2014. Novartis’s HSV/VZV product Famvir is expected to follow a similar fate.” Long-term growth in the herpes market will depend on CMV antivirals.
A potential new challenger to Tamiflu
Significant growth is also expected in the respiratory antiviral market. In the short term, the respiratory market will grow due to soaring sales of Tamiflu (oseltamivir). While human influenza prescriptions alone might push Tamiflu sales close to the $1 billion barrier by 2014, significantly more sales may result from global stockpiling for the anticipated avian flu pandemic. Dr de Lima comments: “Since Tamiflu has been widely preferred to rival drug Relenza (zanamivir, Biota/GSK) by most governments based on its oral availability, Tamiflu sales due to stockpiling might potentially exceed $2 billion.” Some experts predict that the worldwide stockpiling market
In the long term, the respiratory antiviral market may witness the introduction of the first-in-class RSV antiviral, A-60444: Arrow’s/ Novartis’s small molecule RSV inhibitor, which is currently undergoing Phase II clinical trials. RSV, a disease associated with a high unmet medical need, is currently managed through either prophylaxis with monoclonal antibody therapy or treatment with Valeant’s inhalable ribavirin (marketed as Virazole). However, due to cost and toxicity issues, drug therapy is currently reserved for high-risk groups. Given the high incidence of RSV, especially in infants, the elderly and the immunocompromised, the market potential of an effective RSV antiviral may be vast.
“Datamonitor believes that A-60444 has potential to achieve blockbuster status, provided the pricing strategy encourages the drug’s widespread use in all RSV patients, not just in those at high risk of severe complications,” Dr de Lima says.
The vaccine alternative
A further factor in the assessment of the herpes and respiratory antiviral market is the increasing shift of focus from post-infective to preventative therapy, most notably vaccines. Datamonitor has identified at least 17 vaccines in clinical development. “A big question mark remains over whether antivirals will be able to coexist alongside prophylactic vaccines in a market increasingly focused on disease prevention,” Dr de Lima says.
Consistent with its already strong presence in the overall vaccines market, GSK is one of the leading developers of herpes and respiratory vaccines: products such as Simplirix (for the prevention of genital herpes) are included in the company’s pipeline. Further reflecting GSK’s growing presence in a market that the company expects to triple or even quadruple by 2015, GSK recently purchased Corixa (a developer of vaccine adjuvants), agreed to acquire the Canadian vaccine developer ID Biomedical, and bought Wyeth’s vaccine plant in Marietta (Pennsylvania) for the development of seasonal and pandemic flu vaccines.
The bigger picture
Datamonitor’s report ‘Commercial Insight: Herpes and Respiratory Antivirals – Leaders Rise and Fall’ provides an in-depth overview of the current herpes and respiratory antiviral market and its future outlook. It covers HSV/VZV, CMV, influenza and RSV, with a focus on both the clinical and the commercial factors driving product differentiation and uptake.
Dr Brigitte de Lima, Datamonitor’s infectious diseases analyst and report author, is available for comment.
Datamonitor plc (DTM.L) is a premium business information company specialising in industry analysis. We help our clients, 5000 of the world's leading companies, to address complex strategic issues. Through our proprietary databases and wealth of expertise, we provide clients with unbiased expert analysis and in-depth forecasts for six industry sectors: Automotive, Consumer Markets, Energy, Financial Services, Healthcare, Technology. Datamonitor maintains its headquarters in London and has regional offices in New York, San Francisco, Sydney, Tokyo, Frankfurt, Shanghai and Hong Kong.
See www.datamonitor.com for further details.