Chiron Vaccines, the world's fifth largest vaccine company, said it will expand its investment in China in vaccine research and development (R&D) following an announcement made by the Ministry of Health to enhance its efforts in carrying out a flu vaccine standard.

"Chiron is committed to protecting millions of people against influenza by increasing the availability of Fluvirin, and vaccine delivery early in the season is an important step in fulfilling this pledge," said John Drinkwater, vice-president of Chiron Vaccines, who visited Beijing earlier this month.

Drinkwater said Chiron Vaccines would establish a vaccine research centre in China in the future. But he did not say how much Chiron Vaccines would invest in China, nor did he reveal if it would acquire local vaccine manufacturers as it did last year - buying PowerJect, the largest British vaccine manufacturer.

Drinkwater released forward-looking statements, regarding sales growth, product development initiatives and new product marketing, that involve risks and uncertainties and are subject to change in China.

According to an analysis report by Merrill Lynch, a world-famous investment banking agency, the total sales volume of vaccine will amount to US$10 billion in 2006, with an annual increase of 10 per cent. And the vaccine market in China will develop faster than that, at 15 per cent annually in the next few years.

"Now the foreign vaccine firms like Chiron Vaccines mainly focus on the high-end market," said Wang Xieshi, a medical professor with Chinese Traditional Medical Institute.

Chiron is the third-largest flu vaccine supplier in China after French company Pasteur and British company Glaxo SmithKline.

In 2003, Chiron's vaccine sales volume in China reached about 2.5 billion yuan (US$301 million), according to Xiong Wei, marketing manager with Chiron Vaccines' Beijing Representative Office.

"Chiron's vaccines were out of stock in Beijing for two months after the severe acute respiratory syndrome (SARS) crisis happened in Beijing last summer."

Xiong said the market demand in vaccine will remarkably increase in the next few years because Chinese people have become aware of the importance of flu vaccine because of SARS.

As the second-largest flu vaccine manufacturer, headquartered in Emeryville, California, Chiron Vaccines is the world's fifth-largest firm in terms of vaccine business. It entered China two years ago.

But in just one year it became one of China's three most important foreign flu vaccine suppliers.

The company's portfolio of products includes vaccines for influenza, meningitis C, yellow fever, rabies, tick-borne encephalitis, haemophilus influenza B (Hib), polio, mumps, measles and rubella (MMR) and diphtheria, tetanus and pertussis (whooping cough).

"People increasingly recognize the value of vaccination and are seeking it at unprecedented rates," said Xiong.

According to Drinkwater, Chiron manufacturing teams work hard and will continue efforts to increase production to record levels and to deliver the vaccine to market as quickly as possible, allowing people to act early to protect themselves and their families.

So far, there are 13 domestic and five foreign vaccine manufacturers in the Chinese mainland, exceeding the United States and Japan. But many Chinese domestic vaccine mainly focus on the low-end market and unsafe vaccine products also endanger people's life, according to Zhu Wei, Director of Shanghai-based Biotechnology research institution.

In 2003, the 13 Chinese domestic vaccine business only shared 30 per cent of the market. And the remaining 70 per cent of flu vaccine was imported from France, the United States and other countries. Huge technique differences exist between China vaccine manufacturers and their foreign counterparts.

And competition will step up in the China's vaccine market in the future, according to Wang.

Foreign funds, including Chiron Vaccines, have recognized the potential of China's vaccine market, which is why Drinkwater continuously stresses Chiron will enhance co-operation with its Chinese partners and expand investment in China.

Chinese vaccine companies had to accept the fact that technique, instead of price, will be a decisive factor in the market, Drinkwater said.

(Business Weekly 08/17/2004 page10)