Series of sales right transfers occur in KOR

Domestic companies in heated competition for vaccines

HK inno.N completes copromoting MSD’s vaccines after 2 years

Boryung·Kwangdong to divide the KRW 200 bil sales

GC Biopharma and Kwangdong to jointly sell shingles vaccine ‘Shingrix’… selecting of 2 partners unprecedented

Competition between domestic pharmaceutical companies has been heating up for the rights to copromote vaccines by multinational pharmaceutical companies.

 

With new products being released one after another in Korea, domestic companies are intent on becoming partners to secure these vaccines that generate stable cash flow.

 

In fact, over the past 2 years, 6 domestic pharmaceutical companies were found to have been competing to copromote 15 vaccines by 2 multinational pharmaceutical companies.

 

The joint sales partners are showing mixed responses depending on whether they have secured the domestic sales rights for the vaccines.

 

Eight MSD vaccines will be jointly sold by Boryung Biopharma and Kwangdong Pharmaceutical, instead of HK Inno.N According to industry sources on the 24th, MSD’s partner in joint sales and distribution of its 7 vaccines will be changed from HK Inno.N to Boryung Biopharma and Kwangdong Pharmaceutical starting next year.

 

In addition, Boryung Biopharma will copromote another new vaccine for MSD in addition to the existing vaccines.

 

Boryung Biopharma will sell the shingles vaccine ‘Zostavax,’ the pneumococcal vaccine ‘Prodiax 23,’ the rotavirus vaccine ‘RotaTeq,’ and MSD’s newly approved pneumococcal vaccine, ‘Vaxneuvance’ Kwangdong Pharmaceutical will sell the HPV vaccines ‘Gardasil,’ and ‘Gardasil 9’ from next year.

 

The copromotion partners for the hepatitis A vaccine ‘Vaqta’ and the measles/mumps/rubella vaccine 'MMR2' have not been determined yet.

 

The pharmaceutical industry predicts that it is highly likely that MSD will sign an agreement with a third party other than Boryung Biopharma and Kwangdong Pharmaceutical for the two vaccines.

 

MSD

With the switch, MDS will part ways with HK inno.N, which it had previously jointly sold all 7 of its vaccines.

 

HK inno.N had signed an agreement with MSD in November 2021.

 

For the 2 years from then to this year, the company jointly sold the 7 MSD vaccines in Korea.

 

At the time, the two parties were known to have signed a ‘2+1 contract.’ Under the contract, HK Inno.N was supposed to carry out joint sales for 2 years, and then choose whether to extend the contract for 1 year.

 

After the predetermined 2 years had passed, MSD and HK Inno.N mutually agreed not to exercise the one-year extension option.

 

Entangled copromotion agreements… 6 domestic pharmaceutical companies compete for 2 years HK Inno.N entered the vaccine market by signing a copromotion agreement with MSD in 2021.

 

Before then, Zostavax, Gardasil, and Gardasil had been sold by GC Biopharma, RotaTeq, Prodiax 23, Vaqta, MMR2 by SK Bioscience.

 

In that situation, HK Inno.N signed a copromotion agreement to jointly sell all 7 of MSD’s vaccines.

 

In this process, a chain transfer of sales rights occurred among vaccines.

 

After terminating the copromotion agreement for the 4 MSD vaccines, SK Bioscience won a new copromotion contract for 5 GSK vaccines.

 

These included Boostrix, Menveo, Havrix, Priorix, and Cervarix, which had been previously sold by Yuhan Corp.

 

At a similar period, the sales rights of GSK’s flu vaccine Fluarix Tetra, which was jointly sold by GC Biopharma, had been transferred to Kwangdong Pharmaceutical.

 

Kwangdong Pharmaceutical has been jointly selling Fluarix Tetra with GSK since the winter season of 2021.

 

As such, sales rights transfer for 15 new vaccines have been made between 6 domestic pharmaceutical companies.

 

Regarding the reason for the change in partners by multinational pharmaceutical companies, industry analysts believe that this is the result of intensified competition among domestic pharmaceutical companies to secure distribution rights for vaccines by multinational pharmaceutical companies.

 

Vaccines from multinational pharmaceutical companies generate stable cash flow as expensive ‘premium vaccines’ in the domestic market.

 

In fact, in the case of Zostavax, it had raised over KRW 50 billion in sales before COVID-19.

 

Even during the prolonged COVID-19, it has posted sales of over KRW 20 billion.

 

Gardasil and Gardasil 9’s sales had also exceeded KRW 60 billion.

 

Last year, its sales had increased to exceed KRW 140 billion.

 

The reason why the copromotion agreement with HK Inno.N had not been extended despite the company’s significant contribution to the sales growth can also be interpreted along the same lines.

 

Boryung Biopharma and Kwangdong Pharmaceutical, which became new partners, may have offered better contract terms.

 

From MSD's perspective, the fact that it can focus more on the promotion of its new product, Vaxneuvance, is also cited as a reason for changing partners.

 

Vaxneuvance is a 15-valent pneumococcal vaccine, which was approved in Korea for the first time in 13 years.

 

Vaxneuvance is expected to compete directly with Pfizer's Prevenar 13.

 

It is analyzed that the company chose to change its partner in order to focus on competition with Prevenar 13, which virtually dominated the domestic pneumococcal vaccine market with sales of KRW 40.9 billion last year.

 

GSK signs 2 companies as partners for its single shingles vaccine ‘Shingrix’

Pic of Shingrix

GSK’s shingles vaccine ‘Shingrix’ is also considered an example of intensifying competition among domestic pharmaceutical companies to secure co-promotion contracts.

 

GSK signed a copromotion agreement for Shingrix with GC Biopharma and Kwangdong Pharmaceutical in October last year.

 

Typically, co-promotion between multinational pharmaceutical companies and domestic pharmaceutical companies is made as 1:1 contracts.

 

However, in the case of Shingrix, a 1:2 contract was signed.

 

GC Biopharma will focus on internal medicine and family medicine, where active inoculations occur, while Kwangdong Pharmaceutical will focus on pediatrics, obstetrics and gynecology, and dermatology departments and clinics.

 

Shingrix has received much attention even before entering the domestic market due to its superior preventive effect over existing vaccines.

 

The prevailing view was that it would record unrivaled sales in the shingles vaccine market, which is worth KRW 40 billion per year.

 

As a result, GC Biopharma and Kwangdong Pharmaceutical competed fiercely for the domestic partner position, and a contract was made in an unusual form called a 1:2 contract.

 

Shingrix’s market share has been increasing rapidly after vaccinations began in earnest in December last year.

 

Shingrix's market share surged from 29% in Q1 this year to 47% in Q2 and became the market lead.

 

In Q3, its share increased to 51%, accounting for over half of the market.

 

HK Inno.N to suffer a KRW 200 bil gap in sales… Boryun Biopharma and Kwangdong’s sales to increase Domestic pharmaceutical companies are expected to experience joys and sorrows with the change in partner companies.

 

For HK Inno.N, a sales gap worth 200 billion won is inevitable.

 

On the other hand, Boryung Biopharma and Kwangdong Pharmaceutical are expected to split the sales of KRW 200 billion, as of last year.

 

Zostavax, RotaTeq, and Prodiax 23, sold by Boryung Biopharma, recorded sales of KRW 54.1 billion last year.

 

Adding the sales of the new vaccine Vaxneuvance, annual sales will increase to exceed KRW 50 billion.

 

Kwangdong Pharmaceutical is expected to benefit the most.

 

Last year’s sales of Gardasil and Gardasil 9 amounted to KRW 143.7 billion.

 

Kwangdong Pharmaceutical is also in charge of sales of Shingrix.

 

Kwangdong Pharmaceutical recorded sales of KRW 41 billion in the vaccine sector alone by Q3 this year.

 

When adding on the sales of Gardasil and Gardasil 9, which amount to around KRW 140 billion next year, the sales volume of its vaccine sector is expected to expand to reach nearly KRW 200 billion in annual sales.