SNY Ships Fluzone Early This Season

Zacks Equity Research
July 19, 2012

Sanofi’s (SNY) vaccines division, Sanofi Pasteur, recently announced that it has begun shipping Fluzone vaccine for the 2012-2013 influenza (flu) season. More than 60 million doses of seasonal influenza vaccine will be supplied to US health care providers during the initial phase of shipment.

The company believes that the early shipment of Fluzone vaccine will enable US health care providers to start immunization and also mitigate their concerns related to the supply of vaccines.

Sanofi announced that in the 2012-2013 influenza season, Fluzone will address two new virus strains. Additionally, the company has developed a new syringe cap for Fluzone, which does not contain latex, making it usable in individuals with latex allergy.

Fluzone will be available in three formulations, namely Fluzone vaccine, Fluzone high-dose vaccine and Fluzone intradermal vaccine. Fluzone vaccine has been in the market for more than 40 years and is the only US Food and Drug Administration (:FDA) approved flu vaccine available for 6-month-old children. Fluzone high-dose vaccine, available since 2010, is specifically formulated for individuals above 65 years.
 
In May 2011, Fluzone intradermal vaccine was approved by the FDA for use in individuals between 18 to 64 years of age. The ultra-fine needle makes Fluzone intradermal vaccine convenient and easy to administer.

Apart from the above mentioned formulations, Sanofi also has a candidate, Fluzone QIV, a quadrivalent vaccine for the prevention of influenza caused by two type A and two type B strains in late stage development. We note that in March 2012, AstraZeneca (AZN) had announced the US approval of FluMist Quadrivalent for the prevention of influenza caused by two type A and two type B strains. FluMist Quadrivalent marked the first approval of a four-strain influenza vaccine by the FDA.

Sanofi possesses one of the world’s leading vaccine operations, with total vaccines sales of €617 million in the first quarter of 2012. The company’s portfolio includes pediatric vaccines, influenza vaccines, adult and adolescent booster vaccines, meningitis vaccines and travel and endemic vaccines. Sanofi also has a strong position in both seasonal and pre-pandemic influenza vaccines.

Our Recommendation

We expect Sanofi to continue containing operating costs in order to increase earnings in the face of weakening sales of some of its key drugs. We also expect the company to pursue bolt on acquisitions. We are pleased with the company’s efforts to develop its pipeline.

We currently have a Neutral recommendation on Sanofi. The stock carries a Zacks #3 Rank (Hold rating) in the short run.

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