Analysts grow skeptical about Sanofi's $800M bet on dengue vaccine

Sanofi is betting an estimated $800 million for research and a new facility to produce an experimental vaccine for dengue--and not all analysts are giving the pharma giant ($SNY) very good odds at success.

The mosquito-borne illness is the fastest-growing tropical disease threat in the world, according to WHO figures, and Sanofi has the most advanced vaccine program in clinical trials. However, the Paris-based drugmaker has generated some skepticism about the likelihood of success for the vaccine after turning in mixed results in a major study of the drug candidate in Thailand, where the shot showed some protection against three out of four strains of dengue and failed against the country's most prevalent strain at the time of the trial.

The study results caused Deutsche Bank analyst Mark Clark to clip his projected chances of success for the program from 75% to 30%, Bloomberg reported. Despite dimmed expectations, Sanofi has charged ahead with the expensive effort to develop and produce the vaccine, including the Neuville-sur-Saône, France, manufacturing facility, where the company has invested €300 million ($397 million) to gear up for hoped-for commercialization.

Sanofi has a chance to improve opinions of the vaccine with future results from ongoing studies in some 31,000 patients in Southeast Asia and Latin America. Ahead of the results, the drugmaker has mounted a major public relations campaign, offering to fly journalists from those regions to tour the facility in Neuville-sur-Saone and providing them with access to CEO Chris Viehbacher to get the chief's take on the program.

"It is a gamble," Vincent Meunier, an Exane BNP Paribas analyst said, as quoted by Bloomberg. "They had to invest before knowing what will be the final profile of the product."

The massive gamble could bring the company $2.6 billion in annual sales if the vaccine succeeds in trials. If the program fails, all eyes would turn to rival experimental vaccines from Merck ($MRK) and Takeda Pharmaceutical's recently acquired Inviragen in Boulder, CO. 

- check out Bloomberg's article

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