Sanofi Dengue Bid Seen as $2.6 Billion Hit or Major Flop

Sanofi (SAN), whose vaccines have all but eradicated polio, recently flew journalists from around the globe to a sparkling new factory in France to tout its next big project -- the world’s first vaccine for dengue.

That takes confidence, considering mid-stage studies for the shot last year yielded results that ranged from perplexing to disappointing. Sanofi is forging ahead. It’s readying commercial production of a vaccine to prevent the debilitating and sometimes fatal mosquito-borne malady that’s had outbreaks in the U.S. and Europe and threatens half the global population.

The drug maker is making the first batches of the shot at its new 300 million-euro ($398 million) plant, even as it waits for results next year of make-or-break trials to determine whether the product will be a $2.6 billion-a-year success or an $800 million flop.

“I didn’t think I’d live long enough to see it,” said Duane Gubler, a professor in the emerging infectious diseases program at the Duke-NUS Graduate Medical School in Singapore, and the author of the main textbook on dengue. “We’re near the point where we’re going to be able to not prevent transmission completely, but certainly control dengue as a major public health problem.”

Photographer: Vincent Moncorge/Sanofi via Bloomberg

A worker is seen at Sanofi's dengue vaccine plant in Neuville-sur-Saone, France. Close

A worker is seen at Sanofi's dengue vaccine plant in Neuville-sur-Saone, France.

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Photographer: Vincent Moncorge/Sanofi via Bloomberg

A worker is seen at Sanofi's dengue vaccine plant in Neuville-sur-Saone, France.

Success isn’t guaranteed. The vaccine provided good protection against three of the four viruses that cause the disease in a trial among 4,000 children in Thailand last year. Yet it was ineffective against type 2, the dominant dengue strain in Thailand at the time of the trial. Sanofi is now studying the shot among more than 30,000 children and adolescents in Latin America and Southeast Asia.

‘Still Problematic’

Those results have left some skeptical, with the scientific community “expecting far more promising results,” said Cam Simmons, a professor of infectious diseases at Oxford University. “It’s going to be difficult to change that dengue 2 result in Southeast Asia. I think it’s still going to be problematic.”

The result prompted Mark Clark, an analyst at Deutsche Bank AG in London, to cut his estimate for the vaccine’s chances of success to 30 percent from 75 percent.

“It is a gamble,” said Vincent Meunier, an analyst at Exane BNP Paribas in Paris. “They had to invest before knowing what will be the final profile of the product.”

Success may earn Sanofi 2 billion euros ($2.6 billion) a year in sales, Meunier said. Failure would see the company’s investment in the plant and trials go up in smoke. That cost is estimated at about $800 million by Odile Rundquist, an analyst at Helvea SA in Geneva.

Source: Sanofi via Bloomberg

This handout image shows a close up of the Aedes Aegypti mosquito, the main transmitter of dengue. Close

This handout image shows a close up of the Aedes Aegypti mosquito, the main transmitter of dengue.

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Source: Sanofi via Bloomberg

This handout image shows a close up of the Aedes Aegypti mosquito, the main transmitter of dengue.

Tiered Pricing

“The nature of vaccines is such that generally you have a better feeling for the success of a vaccine than you do for a new drug,” Sanofi Chief Executive Officer Chris Viehbacher said on a call with reporters last week. He described the earlier results as “very reassuring.”

Sanofi’s strategy is to sell the shot on a so-called tiered pricing basis, charging more in wealthier countries and less in poorer ones, Viehbacher said. “Even at an average price level you get to some pretty significant sales,” he said.

Other dengue vaccines are being developed by Inviragen, a Fort Collins, Colorado-based company that agreed in May to be acquired by Osaka, Japan-based Takeda Pharmaceutical Co., and by Merck & Co. (MRK) and the U.S. National Institutes of Health.

Dengue causes flu-like illness that can develop into a rare and potentially fatal complication involving bleeding from the nose and gums, rapid breathing and severe abdominal pain. About 500,000 people are hospitalized each year and about 20,000 die, according to the Geneva-based WHO.

Commercial Doses

While malaria kills many more people -- about 660,000 in 2010 -- deaths from that disease have fallen 25 percent since 2000, while dengue cases have more than doubled over the same time-frame, according to the WHO.

Source: Sanofi via Bloomberg

Sanofi is making the first batches of the vaccine at its new 300 million-euro ($398 million) plant, even as it waits for results next year of make-or-break trials to determine whether the product will be a $2.6 billion-a-year success or an $800 million flop. Close

Sanofi is making the first batches of the vaccine at its new 300 million-euro ($398... Read More

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Source: Sanofi via Bloomberg

Sanofi is making the first batches of the vaccine at its new 300 million-euro ($398 million) plant, even as it waits for results next year of make-or-break trials to determine whether the product will be a $2.6 billion-a-year success or an $800 million flop.

Sanofi’s plant, at Neuville-sur-Saone, will be capable of churning out 100 million doses a year, and the company plans to produce the first commercial doses by the end of this year.

The company offered to fly reporters from Asia and South America in business class to tour the Neuville-sur-Saone facility last month. Journalists from Brazil, Colombia, Mexico, the Philippines, Singapore and Thailand attended the event. Bloomberg News pays its own travel expenses.

No country is following the progress of Sanofi’s vaccine as closely as Brazil, which is preparing to host soccer’s World Cup next year and the Olympic Games in 2016. It has almost 450,000 dengue infections a year on average, more than any other country. Indonesia, Vietnam and Mexico are the next hardest-hit nations.

Madeira Outbreak

The disease isn’t confined to poor and developing countries. An outbreak in Key West, Florida, sickened at least 66 people in 2010. An outbreak on the Portuguese resort island of Madeira last year sickened more than 2,200 people, including tourists from 12 European nations. Two locally acquired cases were reported in Nice, France, in 2010.

“This vaccine, even though it may not have as high an efficacy as you would like for dengue 2, it should still be a very effective public health tool,” Gubler said. “We desperately need all the vaccines we can get.”

To contact the reporter on this story: Simeon Bennett in Geneva at sbennett9@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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