Sanofi’s ( SNY - Analyst Report ) vaccines division, Sanofi Pasteur, recently announced the approval of the expansion of the indication for Menactra (meningococcal [Groups A, C, Y and W-135] polysaccharide diphtheria toxoid conjugate vaccine) in Canada. Menactra is now approved in Canada for patients, age between 9 months – 55 years.

Menactra vaccines are used in patients (age of 9 months – 55 years) to prevent meningococcal meningitis and meningococcal disease caused by strains A, C, Y and W-135 of the bacteria neisseria meningitides.

We note that in November this year, data from a pivotal trial of Menactra was published by the Pediatric Infectious Disease Journal (PIDJ). In the trial, Menactra, as a two-dose vaccine, demonstrated a promising efficacy profile in infants and toddlers aged between 9 months and 23 months. It was observed that the use of Menactra provided protection against four clinically meningococcal strains.

Menactra was first approved in 2005 as meningococcal conjugate vaccine for people aged between 11 years and 55 years. Subsequently, the product’s label was expanded to include infants above 9 months. We note that meningococcal disease mostly occurs in children aged less than five years and those in their adolescence.

In the third quarter of 2012, Menactra generated sales of €208 million, accounting for approximately 14% of total vaccines sales at Sanofi. In the US, Menactra sales inched up 0.6% to €195 million.

Our Recommendation

Currently, approved vaccines for meningococcal diseases include GlaxoSmithKline’s ( GSK - Analyst Report ) MenHibrix (meningococcal groups C and Y and haemophilus b tetanus toxoid conjugate vaccine).

We expect Sanofi to continue to contain operating costs in order to increase earnings in the face of weakening sales of some of its biggest products. We also expect the company to pursue bolt-on acquisitions.

Currently, we have a Neutral stance on Sanofi in the long run. The company carries a Zacks #2 Rank (Buy) in the short run.