Glut of Flu Vaccine Threatens Drug Makers' Sales

Suddenly, the vaccine business doesn't look so great.

With fears of a worldwide swine flu pandemic, companies pumped out millions of doses and logged billions of dollars in sales last year. Now there's a glut of product that's resulting in government's around the world slashing orders.

That's a problem for major vaccine makers like Baxter International Inc., CSL Ltd., GlaxoSmithKline Plc, Novartis AG and Sanofi-Aventis SA. The companies are seeing a potential $7.6 billion in sales shrink, Bloomberg News reports, citing analyst estimates.

In the U.S., health officials cut orders for swine flu vaccine from Australia's CSL but not from four other companies with government contracts. Deerfield, Illinois-based Baxter is only approved for swine flu vaccine outside the U.S. The U.K. halted delivery of the company's vaccine recently. Baxter will discuss its sales when it reports earnings later this month.

Several other European countries, including France, Germany and Spain canceled or reduced orders, Bloomberg reports. In some cases, companies are negotiating with the governments to be compensated for some of the sales lost due to cancellations.

“We are looking how best to amend new orders and supply governments with adequate vaccines,” Glaxo spokeswoman Claire Brough tells Bloomberg.