Sanofi Says Dengue Vaccine Only Helps Those With Prior Infection

(Bloomberg) -- Sanofi said its dengue vaccine only helps people who’d been previously infected with the virus, cutting the value of its stockpiles in yet another setback for a product whose ambitions keep being scaled down.

Regulators should update the vaccine’s label so doctors avoid injecting patients who have never suffered a bout of the mosquito-borne illness, the Paris-based drugmaker said in a statement late Wednesday. The company will take a charge tied to the drop in the value of its inventories that could reduce a key measure of profit by 100 million euros ($119 million) in the fourth quarter.

New analysis of long-term studies shows that for those who never had dengue, vaccination with Dengvaxia can lead to more severe disease. The world’s first dengue vaccine, sold in countries from Thailand to Brazil, is forecast by analysts to generate about $340 million in sales in 2020, down from earlier estimates of $840 million. The souring outlook for the product adds to the challenges facing France’s biggest drugmaker, whose diabetes portfolio has faced pricing pressure in recent quarters.

The latest setback “highlights an increasing reliance on dermatitis-drug Dupixent, with rivals vying for a piece of the market,” Sam Fazeli, an analyst for Bloomberg Intelligence, said in a report. “This means that Sanofi may need M&A to acquire growth, where it’s in the queue behind Novartis and Pfizer, both with much deeper pockets.”

Shares of Sanofi remained mostly unchanged at 76.92 euros as of 9:56 a.m. in Paris trading. The stock has returned about 4.4 percent, including dividends, in the past year.

“The trajectory of certain new launches have been below our expectations,” Chief Executive Officer Olivier Brandicourt said on a conference call this month, citing Dengvaxia. The vaccine was developed over two decades at a cost of 1.5 billion euros.

The vaccine had generated sales of 22 million euros ($26 million) in the first nine months of the year. The drugmaker said the planned charge reflects depreciation of inventories as well as accelerated depreciation of some assets. Despite that, it maintained its 2017 earnings forecast.

To contact the reporters on this story: Marthe Fourcade in Paris at mfourcade@bloomberg.net, James Paton in London at jpaton4@bloomberg.net.

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net.

©2017 Bloomberg L.P.