Poultry vaccines business still offers many challenges
An overview of the past, present and future of the world's leading poultry vaccine companies.
In a highly sophisticated and profit-conscious business, the main players in the global poultry industry today view themselves as food-producing companies. The challenges facing the poultry health companies, particularly those developing biological products that serve the poultry industry, are numerous and have changed dramatically over the last 50 years.
The early pioneers
Over the last 50 years or so, there emerges a fascinating list of pioneers in the field of biological products who have served the poultry industry well. These biologicals companies were started in a variety of ways and at their peak, 24 were producing vaccines in the USA alone. Most were started by individual industry pioneers, veterinarians and scientists who possessed both deep knowledge and great interest in poultry health (see table below).
It is interesting to note that not one of the companies mentioned is in the market today as an independent entity. Each has been acquired or merged, often multiple times.
In the UK, a number of individuals such as Benny Bee, Peter Dalton and Cliff Stuart had similar laboratories but on the whole, stayed in the autogenous market. One reason was that large pharmaceutical companies were also involved in those early days. Glaxo, Wellcome, Pfizer, Beecham, Duphar and Rhone Merieux were already present with poultry ranges. A number of these companies, giants at the time, have since been acquired or merged, or have abandoned their animal health divisions.
Among the reasons for change are less potential for major growth in the poultry industry than others, and a slowing of expansion in the sector. Another reason is the rapid change in the industry. Ownership of the biologicals companies has been a rollercoaster of mergers, acquisitions and changing policies of the pharmaceutical companies with animal health divisions. Examples include Solvay and Akzo, which decided after a number of years that this sector did not fit their portfolio. Furthermore, launching poultry products took ever longer and required more investment. Smaller companies found it hard to compete, and internal pressures saw priorities put on other, more lucrative sectors, such as pets.
Because modern biologicals industries are truly global, the poultry business is dominated by ever fewer suppliers. As this article was being prepared, Schering Animal Health acquired the Organon business from Akzo, which included Intervet.
Of the 24 US companies mentioned earlier, only six are key players today and one, Pfizer, has a limited product range. Those remaining are CEVA, Fort Dodge Animal Health (FDAH) Lohmann Animal Health (LAHI) International, Merial, Pfizer and Schering.
The company that became Merial (Merial-Select in the USA) was formed by the owners of three Georgia poultry companies in 1971 as Select Laboratories. Their objective was to produce Marek's vaccines for their own use. These vaccines were new and in short supply. After 9 years, it was decided to expand the business and apply for a United States Department of Agriculture (USDA) federal licence.
The company was built on a number of key factors. Its philosophy was that all people in key positions at Select understood the customer. They focused originally on the broiler market as the major revenue generator, and they were innovative in product combinations and pioneers in large, multi-dose containers for vaccine. They were first in the market with a number of mass application systems, including Spravac for the hatchery administration of Newcastle disease and infectious bronchitis virus (IBV) vaccines. They focused on Marek's disease with a number of key firsts, both combinations and dosage levels. The volume of business in this sector enabled them to have lower production costs. There was a strong service organisation.
The company sold to Rhone Merieux (RM) of France. Owned by Rhone Poulenc (RP), RM later joined with Merck to found Merial as a joint venture. The RP side of the venture became Sanofi/Aventis.
I shall describe these two companies separately as the buy-out process is still underway and their histories have been separate to this point.
Schering-Plough Animal Health
Schering has strengthened its position in the poultry market by acquiring some of the best companies, including ASL and Mallinckrodt in the USA. At the time of purchase, Mallinckrodt included Sterwin and Pittman Moore. The latter included Glaxo and Cooper from the UK.
These complicated pedigrees have formed the basis of a wide product range, although the company did not seriously enter the markets for inactivated or Marek's products.
Recently, Schering has become market leader in the coccidiosis vaccine sector: products include Coccivac from the US and Paracox products from Glaxo UK. It has moved the market to day-old spray with innovative spray equipment, and careful attention to service. The company has launched successful niche products including the IBV vaccine, Shorevac. They have also maintained an interest in pharmaceuticals. The Intervet range makes the joint company stronger.
Intervet started in the Netherlands in the mid 1950s as Nobilis, and its headquarters are still in Boxmeer. It entered a joint venture with KZO, which finally became Akzo. The company entered the USA in the 1980s by taking over Inter-Continental Biologics and later Hoechst-Rousell Vet, which included Tri-Bio.
Intervet has always been research-based and close to the market needs. It introduced many innovative vaccines, and has not been reluctant to launch what some saw as niche products. Excellent technical service has developed markets for these products, including a number of infectious bursal disease (IBD) variants, IBV such as 4/91 and GA88, pneumovirus and avian influenza (AI).
The company has a reputation for strong backing of a launch with well presented technical data, and it has been strong in diagnostics. Schering's coccidiosis vaccines should be a positive addition to the joint range.
Fort Dodge Animal Health (FDAH)
FDAH has made a number of acquisitions over the years. At its core is the poultry vaccine business from Solvay, which it purchased when the chemical giant left the poultry business following a sale to American Home Products, FDAH's parent company. Solvay's range included products from Salsbury and Duphar.
The strengths of FDAH are its solid US business and the distribution network inherited from Solvay/Salsbury. This organisation was one of the first to be classed as global, and FDAH has built on this advantage. They have also a number of pharmaceutical products but have divested some of the feed additives.
The product range is wide both in live and inactivated products, and the Bursal range is the flagship of the portfolio.
The company has always offered reliable technical back-up and some top-of-the-market educational materials. Historically, a large number of poultry company personnel, many of whom are now key executives, attended the well known Salsbury Poultry Schools.
Lohmann Animal Health International (LAHI)
Lohmann is part of the PHW group based in Cuxhaven, Germany, and has the advantage of being poultry-focused. The LAHI range consists of products from the purchase of Vineland (1997) and Maine Biologics (2000) in the USA, plus the development of TAD vaccines from Germany. Vineland was the first vaccine company in the USA and always had a wide portfolio of live and inactivated vaccines. Maine Biologics was a pioneer in inactivated products and even introduced them in the USA when it was felt that the industry would not use them. It has recently consolidated its business in its Maine location and is pursuing a strategy under the brand Avipro.
The company has been involved in autogenous vaccine production and this is still part of its philosophy. This approach is difficult to pursue in the corporate world but the end-user is pleased that this focus continues.
LAHI is strong in the breeder and layer area and has products for the control of salmonella, cholera and coryza but it is not involved in the coccidiosis vaccine market.
Biomune was purchased by CEVA in 2005, following German (Lohmann) and Japanese (Nippon Zeon) ownership. Founders J. Leonard and R. Plylar maintained majority shares until the CEVA purchase.
At the start, the company was strong in the inactivated autogenous market and made a solid reputation in meeting these niche needs. Solid contact with the industry has enabled it to expand the portfolio into fully registered products, both live and inactivated.
They have been aggressive in the launch of a number of vectored pox products, including the unique Pox/ILT and Pox/MG. In January 2007, they introduced their first vectored HVT.
It will be interesting to observe how the strategy with CEVA will develop.
The recent purchase of Embrex by Pfizer has added a new paradigm to this company. Embrex was formed to develop and market the inoculation of fertile eggs at 18 days in the hatchery. This in-ovo technology for Marek's vaccines has become the normal method of administration in the US broiler industry.
Embrex did not start as a biologicals company but developed and launched technology using Virus Neutralising Factor (VNF) for IBD and Newcastle disease. After much investment, the company has recently launched an in-ovo vaccine for coccidiosis in broilers.
The main income for Embrex remains its injection machine. It remains to be seen how they proceed in the vaccine market itself. They have been heavily committed to service and this will be a positive going forward.
All the companies who are still players in this market are truly global. Except Embrex, all have manufacturing in more than one country, complying with both USDA and Good Manufacturing Practice (GMP) standards. All have economic strength based on production volume and they understand their customers' business.
Success is also possible with manufacture outside the USA. The protection of markets by the individual countries can make global registration difficult but it can be achieved with perseverance. Hipra (Spain), ABIC (Israel), Avimex (Mexico) and Bioproperties (Australia) have made successful international moves.
In other key markets China and India, for instance the efforts of the local biologicals companies have been mainly focused within their own countries because of difficulties with international regulatory requirements. American and European companies will need to keep a close eye on the situation in these key countries to ensure they obtain a share of the business. Joint ventures in both China and India are being actively pursued.
The main expansion for US and European Union countries must come from the international markets. Poultry numbers in the USA will continue to rise but slowly. In Europe, the numbers may fall in certain countries as legislation and environment make it difficult to expand.
Because of its size, the US market is still key for companies who purport to be global. The concern is that the end users are now so large. US market-leaders Pilgrim and Tyson have a combined market share of over 45%. The situation in Brazil, Thailand, South Africa and Mexico is similar: good relationships and close contacts with the few leading players are vital.
Improved methods of production
I predict that improved production methods will be the main trend in the next few years. Since I joined the industry nearly 50 years ago, little has changed in the manufacture of live or inactivated vaccines. The fertile egg is still at the heart of manufacture and that leads to vulnerability. Should a major disease situation occur and AI is only one of the dangers the raw material is vulnerable. The good news is that there is massive investment in vaccine research today, stimulated by the H5N1 AI threat in particular. We will be looking at some exciting alternatives.
Cell lines, fermentation and plant cell-based products are likely to take their place in the vaccine mix.
This would also help the poultry industry, speeding up the identification of potential new products based on the specific disease agents. Methods are being developed to measure immune response to disease agents and vaccines, which should lead to improved and more specific products.
It seems that after a disappointing start, the role of genetically modified organisms may be finally making progress.
The pox vectors have performed well when birds are susceptible to the vector but antibodies to pox itself have proved a problem. Recent HVT (Herpes Virus of Turkeys) vector launches by Biomune, Merial and Intervet are exciting. Antibodies should not be as much of a problem.
Recent research papers have covered using gene deletions, Newcastle disease and adenovirus vectors, reverse genetics, plant cell-based systems (Dow Agro Sciences), DNA vaccines, cellular immuno-modulators and baculovirus.
In the coccidiosis market, ABIC of Israel has introduced into certain markets a breeder product using maternal antibodies for broiler protection against coccidiosis an attempt to save labour and avoid reactions.
It remains to be seen how regulators view these new approaches.
In this highly competitive industry, the cost and ease of administrating new concepts are critical. The poultry industry will apply these products to millions of birds, and they measure the economic impact to three decimal points.
In-ovo technology is likely to grow but only time will tell us how many antigens we can apply at 18 days that will all work together. The industry likes the convenience and potential accuracy of this method. Recent work in Europe on a reversed genetic infectious bronchitis vaccine could be a real plus if the early research work is confirmed.
Adjuvants and methods of administration will continue to improve. Many adjuvants in use today are based on old technology, which could be improved.
More rigorous standards
It is important that the high standard needed for vaccines is maintained worldwide. Questionable AI vaccines are a cause for concern by all of us, not only for poultry, but for humans as well.
The vaccine industry has gone through significant changes over the years, and it is faced with challenges that it must and will meet. The poultry industry needs the vaccine industry, and the world needs the poultry industry to provide high quality protein at a reasonable price.
The vaccine industry has much to be proud of, and without the innovative solutions provided over the last 50 years to ensure bird health, the modern, highly intensive poultry industry would not have been possible.