With the summer approaching, the last thing on your mind may be the winter and the coughs and sneezes that often come with it. But for some health-care companies it’s a different matter.
Part of my work as a global health-care analyst involves undertaking research trips to keep up to date with industry developments and identify potential investment opportunities. I recently visited the key production facilities of one of the largest flu vaccine producers in the UK to familiarise myself with the nuts and bolts of how a product that can be given to millions of people worldwide every year is produced.
Despite most cases of flu tending to peak in the winter months, the manufacture of the vaccine begins up to six months earlier when the World Health Organisation provides manufacturers with an indication of the type of flu viruses expected in the year ahead. The scale and complexity of production highlight why only a handful of companies have the skills to do it on a global basis. The key component to the manufacture of flu vaccine may be a surprise: chicken eggs.
For more than 30 years, eggs have been the key ingredient in which the flu virus has been grown before it is made safe and purified for use in the vaccine. And this is not just a carton or two. At peak production, manufacturers can be using 300,000-500,000 chicken eggs a day – laid, collected and transported from specialist farms to factory!
The scale and complexity of flu vaccine production also underpins why companies that produce these vaccines can offer attractive business models, with high barriers to entry. However, changes to how these vaccines can be produced are beginning to emerge. At least one leading manufacturer has developed a way of growing the virus in cells rather than eggs. It will take a number of years for cell-based flu vaccine production to become widely accepted, but it should reduce both production cost and complexity.
With influenza causing three to five million cases of severe illness worldwide every year, perhaps now is the time to think about putting a November flu jab reminder in your diary.
Authors
Newton global research team
Our team of research analysts.
This is a financial promotion. Any reference to a specific security, country or sector should not be construed as a recommendation to buy or sell this security, country or sector. Please note that holdings and positioning are subject to change without notice.
Comments