Sanofi ups the ante in vaccines with new €350M plant

Sanofi CEO Olivier Brandicourt took a hard look at the French drugmaker's operations after he took the helm—and he put its vaccines business front and center in the company's growth plans.

Nothing confirms that decision more obviously than what Sanofi rolled out Thursday: plans for a brand-new €350 million vaccine plant in Canada, one of the company's largest-ever investments in a single facility.

With plans to open in 2021, Sanofi will build the new plant at the Sanofi Pasteur Canadian headquarters in Toronto. The plant will produce five-component acellular pertussis antigens, plus antigens for diphtheria and tetanus vaccines.

Philippe Luscan, executive vice president of global industrial affairs at Sanofi, said in a statement that the project is "one of the most important investments for the Sanofi global industrial network." 

"It demonstrates our continued commitment to manufacturing excellence and to better serving our vaccines portfolio to people all over the world," he added. David Loew, head of Sanofi's vaccine division, commented that the plant "will take us one step closer to a world where no one suffers or dies from a vaccine-preventable disease." 

A Sanofi spokesperson said the project will create 2,500 jobs for supply chain vendors and contractors between 2016 and 2021. The company will train internally to fill positions and hire for the plant, she added. 

Even as some areas of Sanofi's business continue to struggle on stepped-up competition and pricing pressure, Sanofi Pasteur has been a reliable performer. Despite its troubled Dengvaxia launch, the division turned in 8.3% growth in 2017 to €5.1 billion.

Polio, pertussus and Hib vaccines—several of which would be supplied by the new plant—played a big role, growing sales 15.3% to €1.8 billion. Flu vaccine sales grew 8.2% for the year to €1.59 billion, while travel and other endemic-disease vaccines chipped in €493 million, a 19% increase. 

For Dengvaxia, it was another story. The dengue vaccine generated just €3 million in sales and became the subject of a controversy in the Philippines. In November, Sanofi warned of an increased risk of severe dengue in recipients who haven't had prior exposure to the virus, setting off a firestorm.

Philippine officials quickly stopped a mass vaccination program and asked for a refund. Sanofi ended up refunding €19 million in unused doses and took an inventory impairment charge of €87 million. 

Still, Sanofi's impressive vaccine sales growth for the year compared to an 8% decline for pharma and a 15.2% increase for specialty unit Genzyme. The drugmaker's important diabetes sales slipped 14.3%.  

Last year's vaccines performance also followed a strong year in 2016, when Sanofi Pasteur grew sales by 8.8%, again outpacing pharmaceuticals.

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