PaxVax ready to strike M&A deals that prove its sales model, CEO says
|PaxVax CEO Ken Kelley outside the 2015 JP Morgan Healthcare Conference|
PaxVax entered the M&A arena last summer, nabbing typhoid vaccine Vivotif from Johnson & Johnson subsidiary Crucell. And it's not stopping there, CEO Ken Kelley says.
The California company has another specialty travel vaccine deal coming that it's currently negotiating, the helmsman told FierceVaccines in an interview at this week's JP Morgan Healthcare Conference. It expects to announce that pact--along with one for a travel med--in the first half of this year.
The way Kelley sees it, the forthcoming agreements will help it"prove the concept" of the company's marketing and sales strategy, which uses just 7 key account managers in the U.S. to promote Vivotif. While the force is small, each manager buys for large populations, building relationships with buyers in very concentrated markets. One manager, for example, only needs to go to "a handful of people" who cover the country's 5 largest retail stores to reach 30,000 to 40,000 vaccinators, he said.
By targeting retail, the Department of Defense, large integrated health networks, universities and large wholesalers and distributers, the tiny team can get out in front of close to 100,000 vaccinators, Kelley said, covering the retail chains that account for 80% of Vivotif doses. The other 20% come mainly from travel physicians, which PaxVax reaches by telesales.
Kelley says he expects this model is "very different," than the ones other companies are using, but the deal interest shows it's a valuable one that "can be leveraged by others."
Until those deals come through, though, the biotech will be focusing on using it to grow Vivotif. PaxVax thinks it can potentially double or triple the size of Vivotif's market, taking it from about $25 million to $27 million in annual sales up to peak sales of $80 or $90 million.
The vaccine currently boasts only 25% of the market, meaning it'll have to steal some share from competitor Sanofi's Typhim Vi. But given that Vivotif is oral and longer-lasting, Kelley says, that's something it thinks it can do.
Reaching price parity with the French drugmaker's shot will also give sales a boost, he said. "We were underpriced relative to Sanofi," he said, but "we're closing the pricing gap."
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