JRE 410

Wednesday November 11, 2015

SANOFI PASTEUR

1.

How did Sanofi develop a product strategy for their

new vaccine? What actions did they take?

Sanofi developed their product strategy with the idea that their new
vaccine will play a huge role in the companys growth strategy and
contribute to long term success. This meant, higher R&D costs and
greater contribution to profits by vaccine. Due to the nature of the
market, the product being created had to be an incremental innovation
and a breakthrough. A first mover advantage was crucial in the vaccine
industry. One example is the MSD Gardasil vaccine which made 2
billion dollar in sales in its first year. It is estimated that the demand for
the dengue vaccine will be 3.5 billion vaccine doses after first 5 years
of introduction. As a result, the Sanofi took action to reduce the time
for the vaccine to enter market by having the industrial capacity to
manufacture the vaccines built alongside the development of the
vaccine to reduce time to market. Our Industrial Capacity is our main
tool to conquer the market. To reduce time and production, a separate
internal structure called the Dengue Company was created that
consisted of a core group of employees that had roles dedicated to
dengue vaccine development, production and marketing.

2.

Considering the 7-stage new product development

process, currently at what stage Sanofi is? Explain.

Currently, Sanofi is in market testing stage. This is a mandatory stage

within the vaccine industry when a prototype has been developed and
is tested which gives the company data on how the vaccine is being
received and its success rate. Sanofi had finished creating its prototype
of the Dengue Vaccine and was testing the vaccine in a sample market
in Thailand with a group of school children. At this stage, good results
can be used by company to test and introduce product in other areas
and countries. This stage can also result in misleading results, which is
what the company executives and team were hoping after the results
of the first test came back showing lackluster performance and vaccine
not providing immunity against one of the four virus strains.

3.

In your opinion, having the facility to be built parallel

to vaccine development was a right move? Why or
why not?

In the vaccine industry, first mover advantage is an indicator of

success and key to grabbing large market share and long term
success. With Sanofi having already invested more than 10 years into
the research and development of the vaccine, the investment of
industrial capacity to manufacture vaccines as soon as approval was
necessary to ensure the time and resources allocated to the project be
successful. As the vice president of the dengue company indicated it
is a gamble, however it is one they have to take to ensure any
success if the vaccine is successful. As he goes on to say, the company
would have to wait another 5 years potentially after approval to start
manufacturing the vaccines which would give time for rival companies
to catch up and pose an unacceptable threat to their highly sought
after first mover advantage. Finally, it would be unethical as victims of
the disease could have been saved but having to wait for something as
elementary as industrial capacity.

4.

Should Sanofi wait for the results of phase III or start

a new vaccine development?

Sanofi have put in too much time and resources into this project to
write it off after one test. They would certainly have to do more tests to
get a more concrete result before making any quick decisions.
Crucially, within this stage of product development, it is very possible
of getting results that are misleading. As the vice president says,
There is currently no alternative against dengue and they should be
proud as the results do indicate that the vaccine does offer protection
against 3 strains. So as a result, it can still be marketed to other
segments such as travelers as well. As a result, Sanofi should wait for
the results of phase III before doing anything rash.