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Does This Upstart Pose a Threat to GlaxoSmithKline?



GlaxoSmithKline plc generates more than $1.2 billion per quarter selling vaccines that are used to treat infectious disease, and one of GlaxoSmithKline's top-selling vaccines is Engerix-B, a vaccine used to prevent the spread of hepatitis B.

Last quarter, Engerix-B helped generate $194 million in GlaxoSmithKline hepatitis vaccine revenue. However, Engerix-B's revenue stream could be in jeopardy if the FDA gives a go-ahead to Dynavax Technologies Corporation 's HEPLISAV-B, a new hepatitis B vaccine that may work better than Engerix-B.

A massive market
Hepatitis B is one of the most common diseases worldwide. An estimated 240 million people have hepatitis B, and as a result, hepatitis accounts for roughly 80% of all primary liver cancers. Because hepatitis B is widespread and it can lead to serious liver disease in up to 40% of hepatitis B patients, global health agencies have been using Energix-B to slow its spread.

Arguably, the greatest need for hepatitis B vaccination is in developing regions of the world, but there's still a big need in developed countries, too. According to the CDC, there are up to 1.4 million chronic cases of HBV in America and another 13.3 million cases in Europe. Given those figures, it's not surprising that sales in the U.S. -- where prices tend to be higher -- accounted for 45% of GlaxoSmithKline's hepatitis vaccine revenue last quarter. For its part, the EU represented 35% of GlaxoSmithKline's hepatitis sales.

A need for improved options
Hepatitis B can be readily transmitted from person to person, and the hepatitis B virus can survive outside the body for at least seven days. Despite currently available prevention efforts, up to 20,000 new cases of hepatitis B are estimated to occur in the U.S. every...