Following growing internal and investor concern, Pfizer India Ltd, is reworking its strategy with respect to its majorly degrowing hepatitis vaccine brand, Hepashield, according to a company source here. The brand, which was launched in 1999, had emerged as the number two brands just six months later, the source recalled.
According to wholesale market sales data, the brand has suffered a degrowth of 53 per cent to record a sales of Rs 9.32 crore in the 12 month period ending July 2002.
A leading analyst said there was a possibility that the company might exit the vaccine business which itself has shrunk by around 40 per cent. Promotion of the vaccine brand is rather expensive in which case it would make sense to stop the business.
"Vaccines, which was a good market earlier, are fast becoming a commodity business. I would expect Pfizer India to exit this business in the near future," an international analyst said.
Exit would not be difficult for Pfizer, thanks to a co-marketing agreement with Shantha Biotechnics Pvt. Ltd in which it enjoys the first right of refusal to marketing. It may be recalled that Pfizer had entered into a co-marketing agreement with Shantha Biotech for marketing the latter's recombinant DNA vaccine for hepatitis-B under the brand `Hepashield'.
Hepashield has a market share of 9.74 per cent and is ranked fourth in terms of turnover after Wockhardt's Biovac B, GSK's Engerix-B and Zydus Cadila's HB Vac. Shantha Biotech's situation is no better with its product degrowing at a higher rate of 66 per cent. Its brand, Shanvac-B has sales of Rs 4.34 crore and a market share of 4.54 per cent. The total hepatitis B vaccine market is worth Rs 95.65 crore.
The company has realized that it has not been able to move forward with the right business model for the vaccine, a segment that is being bled by a few price warriors, a top official said recently.
"The major shortfall in the quarter is because of our inability to move forward with a right business model as far as the vaccine is concerned. In fact, the entire shortfall, almost about 4.5% of the growth, has been impacted mainly because of the vaccine. As you are aware, we had a peak period of sales in the earlier year on vaccines and this year, we have hardly any sales of vaccines. So obviously, the quarter would be very adversely impacted," Kewal Handa has been quoted as saying at an investor conference recently.
Asked by an analyst if Pfizer was having second thoughts on the vaccine business or would want to be in it and really grow, Handa said, "We are watching this very closely and I think by the end of this quarter we will finally come out with a decision."