The Markets
Introduction
Imugene owns an exclusive and worldwide license for the use and improvement of Adenoviral Vectors in developing and commercialising a range of biological products for pig and poultry industries. As a result of the successful resolution to the US patent interference, Imugene also now directly owns the two porcine patents in the US.
Imugene’s biological products include productivity enhancers, which can replace the current use of antibiotics, drugs or chemicals, and vaccines to protect against specific infectious diseases. Imugene’s products focus on providing relief to intensive producers from factors causing major economic concern. Imugene aims to capture some of, and increase, the pig and poultry health product markets.
Animal Health Products Market
Chicken Health Product Markets
The total value of chicken meat and eggs produced in 2005 by the top 20 producing countries was $47.3B and $42.4B respectively. This $90B industry spends approximately $3.2B on maintaining the health of its flock of which approximately $640 million is spent on “biologics” (vaccines and other preparations excluding antibiotics and feed additives).
Poultry Productivity Enhancer Market
On a global scale the annual production of broiler meat is 40.5 million metric tonnes derived from approximately 48 billion birds. The commercial broiler industry involves the rearing of massive numbers of birds in purpose built facilities. In the US and Europe the industry has become highly consolidated and vertically integrated. As a result, producers have become extremely efficient.
The intensive confined rearing of tens of thousands of birds in large sheds presents major health management challenges for producers. Profit margins are highly dependant on production efficiency. This efficiency is in turn dependent on the number of birds surviving to marketable age, the corresponding rate of weight gain, feed conversion ratios and cost of treatments to prevent or reduce disease or to promote healthy growth.
In addition to animal welfare issues, illness or death have a serious negative impact on profitability. In these intensive production industries, animal health treatments are assessed primarily on cost-benefit.
Improvements in productivity are measured in fractions of cents and percentages. Producers assess the cost of treatments against the value of the improved output and productivity achieved. By comparison, the improvements delivered by Imugene’s Poultry Productivity Enhancer vaccine are double-digit benefits.
Diseases in the poultry flock can devastate commercial outcomes. In general, the incidence and severity of disease is increased with higher stocking density, dietary changes, ventilation and stress such as high or low shed temperatures. Profitability margins are reduced by disease due to reduced growth, reduced feed conversion, costs of drugs and labour costs of treatment.
Antibiotics are currently added to poultry feed as growth promotants to protect birds against bacterial infections. Until the development of Imugene’s vaccine, there were very few alternatives to antibiotics as a preventative treatment for bacterial disease. Consequently, antibiotics have and continue to be routinely added to feed for poultry production to protect birds against infections and avoid production losses.
Consumers and regulators are demanding chickens free of antibiotic or chemical residues. Imugene’s product is biological and therefore non-chemical, non antibiotic and residue free.
An initiative announced by the European Union in March 2002 has banned the use of antibiotics in feed as growth promotants. This regulatory ban combined with public pressure for chickens free of drugs and chemicals has increased the demand for alternatives that provide disease prevention, healthy and safe growth promotion and improved feed efficiencies. This provides a highly receptive market for Imugene.
Avian Influenza Vaccine Market
The total market for AIV vaccines for chickens can be approximated to be in the hundreds of millions of dollars.
Currently, the USDA maintains a bank of 40 million doses of avian influenza vaccine for use in birds and is currently expanding the bank by another 30 million additional doses. In addition, the European Commission adopted new legislation in December 2005 for vaccination of poultry from farms with confirmed low pathogenic influenza (Dir/94/EC) to be implemented by 1 July 2007. Italy, France and The Netherlands are currently vaccinating. The Chinese government announced plans in 2005 to vaccinate all 14 billion of its farm birds.
Avian Coccidiosis Vaccine Market
In 2004 in the UK, coccidiostats accounted for 31% of antimicrobiobial sales (by tonne) for all food animals. In the USA in 2001, 74% of all producers used some form of coccidiostat accounting for an increased cost per tonne of food of ~$US3.00. An estimated market for coccidiostats in the US using these figures is ~$US100 million per annum.
There are a number of drivers of market need for other coccidia control measures:
- Coccidiostats only control (not prevent) disease,
- Current coccidiostats are declining in efficacy due to developing resistance,
- The use of coccidiostats is under increasing pressure from regulatory authorities and consumers because of chemical residues,
- Coccidiosis has such a dramatic impact on commercial poultry production it is unlikely that poultry industries will be forced to cease coccidiostat use unless there are effective alternatives.
An effective vaccine is available. A ‘non-vectored’ sub-unit coccidia vaccine is currently sold by Abic for the breeder market (1.4 billion birds in 2005). However, it is expensive and laborious to administer this vaccine as it requires injection. As the Imugene Vector Delivery System vaccine does not require injection, it is ideal for mass administration to many thousands of birds via their drinking water or via aerosol using minimal labour. Thus the vaccine can potentially be used in the much larger broiler market.
Pig Health Product and Vaccine Market
Pork is the world's most widely eaten meat, production in 2005 102.5 million tonnes, compared to beef and veal at 60 million tonnes. As a protein source, this nears the 116 million metric tonnes of wheat that were produced worldwide in 2004.
The total value of the global pig health products market is estimated to be US$4.45 billion per annum.
Products sold into the pig production markets worldwide are dominated by three major segments:
- Medicinal feed additives - predominately low dose administration of antibiotics (60%),
- Nutritional feed additives - mainly vitamins, mineral and enzyme supplements (20%),
- Biologicals – Mainly vaccines and non-chemical products of organic origin (20%).
The USA and Europe, followed by Asia, are the key target markets for any new pig product. Although Asia has the largest population of pigs followed by the European Union and the Americas (North, Central and South), the USA and Europe are the largest markets for pig animal health products, with the USA market approaching US$1 billion per year.
The global market for biological products is projected to grow substantially over the next 5 years while at the same time medicinal feed additive markets (antibiotics) are projected to significantly reduce. This growth in the biologicals market will include new vaccines for emerging diseases such as Porcine Respiratory & Reproductive Syndrome (PRRS) and biological productivity enhancers replacing in-feed antibiotics.
The market for each of Imugene's pig vaccine products is estimated to be in the hundreds of millions of dollars.
Poultry Products Market |
Pig Products Market |