Indian billionaire Cyrus Poonawalla, founder of the world’s biggest maker of vaccines, will slash the price of polio immunization and introduce shots for diarrhea and pneumonia, undercutting Pfizer Inc. and GlaxoSmithKline Plc. (GSK)

Poonawalla, who set up the Serum Institute of India Ltd. in 1966, will use last year’s acquisition of a Dutch vaccine business to add the injectable form of polio inoculation to the oral drops the Pune, India-based company supplies to organizations such as the United Nations Children’s Fund, he said. The closely held group also plans to sell a low-cost pneumococcal shot to compete with Pfizer’s $4 billion Prevnar pneumonia vaccine by 2016.

The plan by Serum Institute, which says it supplies vaccines used to immunize two out of three children worldwide, will “revolutionize” efforts to eradicate polio that affects nerves and results in paralysis, said Bruce Aylward, assistant director-general at the World Health Organization. The Bill & Melinda Gates Foundation, a key funder of the effort to exterminate the malady, has backed the proposal as oral drops, made of live virus, carry the risk of infection.

“On May 30, Mr. Gates came over for a private dinner at my house,” and asked that Serum Institute remain family-owned, Poonawalla, 71, who also rears thoroughbred racehorses, said in an interview at the company’s headquarters. “The obvious reason was that, as soon as we sell the company, ‘big pharma’ would immediately double the price of vaccines.”

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