Panacea Biotec: Making The Vaccine Shift

WHILE COVID-19 turned out to be a one-off bump in revenue opportunity for many vaccine makers, the pandemic period will remain a decisive phase in the three-decade-old history of Delhi-based vaccine manufacturer, Panacea Biotec, for a different reason. It was the time when the company re-drew its plans, reshuffled businesses, and began to focus more on vaccines for the future.

"This is Panacea 2.0.," says Rajesh Jain, chairman and managing director, Panacea Biotec. The company divested its India-focused pharmaceutical brand portfolio in March 2022 to generate funds for investments in new vaccine development projects. The result: Panacea is developing a vaccine platform that can address pandemic outbreaks of the future.

The plan is to develop a single vaccine to tackle Severe Acute Respiratory Syndrome (SARS), Middle East Respiratory Syndrome (MERS) and Covid-19, and similar viral disease outbreaks. The company has also invested in developing a first-of-its-kind vaccine for another major problem — the Dengue outbreak. The vaccine candidate, undergoing clinical trials now, promises protection against all four serotypes of the Dengue virus. Other vaccines are also in the pipeline.

"We are preparing a vaccine platform that can be quickly adapted to any kind of SARS-COV-2 variants and other betacoronaviruses. It is a collaborative effort of Panacea, Government of India (Translational Health Science and Technology Institute [THSTI], Faridabad) and Coalition for Epidemic Preparedness Innovations (CEPI). Similarly, our Dengue vaccine candidate, a preventive single dose across all four serotypes, is developed in collaboration with the National Institutes of Health, US," says Jain.

With around 400 million infections globally every year, Dengue is a problem affecting the entire developing world, especially India. Unlike others available for restrictive use in the market, Panacea is expecting its vaccine to provide protection for the 2-60 age group. "We have done phase I and phase II study in India and have completed a three-year safety profile. The ICMR will now do phase III clinical trials with more than 10,000 participants. We expect this vaccine to be in the market in the next 2-3 years," adds Jain.

With the exception of FY19, Panacea has been improving its sales revenues constantly for the last five years. Stock market analytics firm Trendlyne places the company in the 'strong performer, under radar' category, suggesting growth and value potential of the stock. However, what explains the company's disproportionately high income and profits in FY22 are the proceeds from the sale of the India and Nepal rights of its legacy pharmaceutical brands last year to Delhi-based Mankind Pharma for ₹1,872 crore. While Mankind chairman Ramesh Juneja had termed the deal as "the celebration of a long harboured relationship" with Panacea's promoter, Jain considers it as the most critical one in the firm's growth history.

"We were sitting on a debt of around ₹1,000 crore, and had a huge pipeline of new molecules we wanted to develop. There was huge potential for our products in the North American and European markets, where we were launching one after the other, but which required capacity expansion. The pharmaceutical products (worth ₹250 crore) — which we were marketing in the country were also doing well, but what we considered internally was the value the new assets can create and the health impact these (future) products can deliver. So, we decided to sell those brands. We made close to ₹1,900 crore," explains Jain.

"We continue to sell the brands in international markets. The manufacturing facilities and R&D centres are all with us. But with the sale proceeds we became debt-free, and we were left with cash on the table to do what we want," he adds.

Panacea is now scaling up production of its vaccine portfolio, including EasySix, which gives protection against Diphtheria, Tetanus, Pertussis. Hepatitis-B, Influenza, and Polio. EasySix, patent protected in 30 countries, is estimated to have the potential to serve a $1 billion annual market by 2030. "Globally WHO has recommended its inclusion in the immunisation programme and UNICEF has already floated the bid for it. We want to increase the capacity to 50-70 million doses annually. We have licensed the vaccine to Serum Institute of India. Together, we should be able to supply around 100 million doses to the global immunisation programme. We expect Panacea will join the programme in 2025, Serum is likely to join earlier," says Jain.

Panacea is also developing a vaccine for Pneumococcal diseases manifested often as Pneumonia. Named NuCoVac-11, the vaccine, which has completed phase II clinical trials, provides protection against 11 of the most common disease-causing serotypes. "It will be an affordable vaccine for developing countries, including India. We have received permission for phase III. We are targeting to launch in 2024," says Jain.

"Apart from this, we are also looking at Tetanus and Diphtheria (TD), a programme done by governments across the world. India is currently procuring — close to 80 million doses of this vaccine annually, from two suppliers. We will be the third supplier. We have a capacity to produce 70 million doses annually," says Jain.

On the pharmaceutical front, in April 2022, Panacea joined hands with Apotex to launch the authorised generic version of cancer drug nAb-Paclitaxel in the U.S. This nano particle-based medicine is also registered in Canada and Australia, and Panacea expects to introduce it in these markets in 2023.

Like several other vaccine makers, Panacea also had plans to capitalise on Covid-19 vaccine demand, but it did not take off. The company's agreement with Russian Direct Investment Fund to produce and sell Sputnik V Covid-19 vaccine developed by the Gamaleya National Research Center of Epidemiology and Microbiology didn't make much headway due to geopolitical issues arising out of the Russia-Ukraine war.

It seems that instead of the one-off revenue from Covid-19 vaccine, Panacea will derive strength from the one-time sale of its India pharma brands to boost the company's development plans for future vaccines.