Sanofi SA (ADR) (SNY), Merck & Co., Inc. (MRK): Healthier Days Loom as 3 Big Pharmas Move on Dengue Shots

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Mosquito bites sure suck, literally and figuratively. But more so if these are delivered by the insects’ female species, which cause viral infections. But forget malaria. It is dengue fever, also known as hemorrhagic fever, which now ranks as the world’s most virulent mosquito-borne viral disease, says the World Health Organization. Some 3 billion people in 100 countries, or roughly half of mankind, are estimated to be at risk of this disease, the incidence of which has grown 30-fold during the last 50 years.

Poised for gains from brewing remedies

The good news is, in about two years, the world will possibly have its first dengue vaccine. The big pharma Sanofi SA (ADR) (NYSE:SNY) is now conducting two late-stage human testings involving some 45,000 participants in Asia and Latin America. The results are expected either late 2013 or in 2014.

In addition, there are other vaccine types in the most advanced stage of development. Phase I trial, for instance, has been completed on a vaccine developed by the privately held Hawaii Biotech. New Jersey-based Merck & Co., Inc. (NYSE:MRK) now owns the rights on this vaccine, which it acquired in 2010.

The U.K.-based GlaxoSmithKline plc (ADR) (NYSE:GSKis also in pursuit of a vaccine type similar to Sanofi SA (ADR) (NYSE:SNY)’s. It has conducted several clinical studies on this vaccine, including those done in the U.S., Puerto Rico, and Thailand. The company has also partnered with the Fiocruz, a Brazilian foundation, for the development and manufacturing of the vaccine for dengue in Brazil where this disease is a major health concern.

A prop-up for a weak quarter

Sanofi SA (ADR) (NYSE:SNY)An advance in Glaxo’s pursuit of a dengue vaccine should provide tailwinds to the company, which has been reaping some negative market sentiment due to a recent bribery scandal in China and generics eating into its market share. Reporting a 4% core EPS gain on 2% sales growth in the second quarter, Glaxo acknowledged that the result of the bribery investigation is likely to impact its subsequent performance in China.

Certainly, a step up of the dengue vaccine in Merck & Co., Inc. (NYSE:MRK)’s pipeline can also burnish this company’s allure among investors who were turned off recently by a staggering 48% drop in company earnings and 10% decline in revenue during the second quarter primarily due to competition from generics.

Like Glaxo and Merck & Co., Inc. (NYSE:MRK), Sanofi SA (ADR) (NYSE:SNY) has also been feeling the pinch of generic competition. In the second quarter, sales lost to generics resulted in a 6.3% decline in Sanofi’s total sales and an 18.5% drop in business EPS.

Despite their recent weak results, a strong rebound from this triumvirate can’t be discounted. Besides their dengune vaccines under development, they also have other drugs in the pipeline which are potential earning catalysts.

For the near term, Merck & Co., Inc. (NYSE:MRK) hopes to draw strength from about 40 drugs in its pipeline, out of which six are close to market launch. Just this July, the U.S. FDA has accepted the new drug application for Merck’s anti thrombotic candidate, vorapaxar, for standard testing. Speculations are also rife that the company is eyeing to bolster its product entries in the lucrative oncology medicines through an acquisition.

GlaxoSmithKline plc (ADR) (NYSE:GSK), for its part, flaunts new respiratory products coming onto the market, one of which is the recently FDA-approved Breo Ellipta, which analysts believe to have a peak potential of $1.3 billion sales in the U.S. alone. Likewise potent in earnings possibility is the company’s protein-based therapy, ofatumumab, for multiple sclerosis, now on Phase II trial.

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