The U.S. Army, which like its Japanese enemy lost thousands of men to the mosquito-borne disease in the 1940s, has piled resources into defeating the tropical killer. But it may be about to see the battle to develop the first vaccine won not in the United States but by French drug company Sanofi.

The Paris-based firm hopes for positive results in September from a key trial among children in Thailand that would set it on course to market a shot in 2015 which would prevent an estimated 100 million cases of dengue infection each year. Of 20,000 annual deaths, many are of children.

For Sanofi, which has invested 350 million euros ($440 million) in a new French factory to make the three-dose vaccine, it could mean a billion euros in yearly sales as half the world is exposed to the disease, notably in fast-expanding tropical cities from Rio and Mexico to Manila and Mumbai.

But like British rival GlaxoSmithKline, whose new malaria shot has shown promise against another mosquito-carried scourge, Sanofi is also preparing for pressure to make its drug accessible to billions too poor to pay the likely market price.

It has been long wait. Identified in local outbreaks in the Americas, Africa and Asia since the 18th century - and noted as a serious military hindrance by U.S. generals in their 1898 war against Spain in Cuba and the Philippines - dengue was spread to global pandemic proportions in part due to the massive movements of armies through the Pacific theatre in World War Two.

That conflict, in which some 90,000 American troops were put in hospital by dengue, prompted the first efforts to develop a vaccine, as U.S. and Japanese scientists isolated the virus spread by the bite of the Aedes aegypti mosquito. But the disease, which can cause intense joint and muscle pain, has gone on sapping the health of troops, from Vietnam to Somalia and Haiti, and made lives miserable for millions of civilians.

In the past 50 years there has been a thirty-fold jump in cases. The World Health Organisation officially puts infections at 50 to 100 million a year, though many experts think this assessment from the 1990s badly under-estimates the disease. Most patients survive but it is estimated to kill about 20,000 every year, many of these children less able to fight it off.

TALE OF TWO VACCINES

The U.S. Army's quest for a vaccine had most recently been pursued in partnership with GlaxoSmithKline. But Sanofi now seems closest to offering a viable treatment. And, unlike GSK's malaria injection designed for African babies, it promises to be the commercial blockbuster the French firm needs to refresh a portfolio weakened by expiring patents.

Its estimate of over 1 billion euros in annual sales - Sanofi's 2011 turnover was 33.4 billion euros - assumes that it is added to routine immunization schedules in Latin America and Asia and is also adopted by travelers from farther afield and by military medics in the United States and Europe.

Meeting that sales potential, while getting the vaccine to hundreds of millions who need it across the tropics, will require a careful balancing act on pricing and supply of a product that has yet to be given a commercial brand name.

Orin Levine, executive director of the International Vaccine Access Center (IVAC) at the Johns Hopkins Bloomberg School of Public Health, says the new vaccine is a potential breakthrough but warned its roll-out may not be straightforward.

First up, the vaccine needs to be given in three installments over the course of a year in order to counter the threat from four different types of dengue virus, none of which confers immunity for the others.

"There are going to be some challenges," says Levine. "There's really good economic potential from this vaccine but I think it may take a ramp-up of three to five years."

SANOFI'S BET

In an ideal world, healthcare experts would like a single-dose or, at most, a two-dose vaccine for mass immunization.

A simpler regimen would also be better for travelers, although Pascal Barollier of Sanofi Pasteur, Sanofi's vaccine arm, says many users will be people making regular trips to see families in Latin America or Asia with time to plan ahead. The military, too, often has lead time for troop movements.

In any case, Sanofi is putting its money where its mouth is by spending 350 million euros on a new dengue vaccine factory near Lyon, which is already in test production.

It is a substantial gamble, since Sanofi will only learn whether the vaccine really works when it analyses data from a first study of its efficacy on 4,000 Thai children.

Results from that clinical study, in what is known as the Phase IIb of the international standard three-stage process of assessment, are expected in the third quarter - most likely September. They will also be presented for scientific scrutiny at the annual meeting of the American Society of Tropical Medicine and Hygiene in Atlanta in November.

If the data is good, Sanofi will file for market approval in countries where dengue is endemic like Australia, Malaysia, Singapore, Thailand and Mexico in 2013, suggesting a regulatory green light in 2014 and commercial launch in early 2015.

Submissions in other countries and for the travelers market would follow in 2014 and 2015.

LOOKING GOOD

Early tests have shown a balanced immune response against all four dengue types and Duane Gubler of the Duke-N.U.S. Graduate Medical School, who has researched dengue for four decades, is optimistic.

"Everything they've done so far looks very good," he says. "I think it will be a much better vaccine than malaria."

He expects Sanofi's vaccine will show an efficacy rate of at least 75 to 80 percent, well above the 50 percent or so seen with GSK's malaria shot, which faces the added technical problem of fighting a complex parasite rather than a virus.

The efficacy rate refers to the reduction in the prevalence of subsequent infection among those vaccinated.

Despite both being transmitted by mosquitoes, dengue and malaria are notably different enemies.

Malaria, which is carried by a different mosquito, typically attacks rural populations living near swamps. Dengue, by contrast, has adapted to life in the city and is one of the winners of mankind's accelerating rush to urbanize.

The number of people living in urban areas is projected to rise to 6.3 billion by 2050 from 3.4 billion today, leading to more mega-cities with poor sanitation where dengue and other diseases can thrive, according to a study in The Lancet medical journal last week.

Globalization has also brought cases of dengue into southern Europe and the United States, particularly Texas and Florida, although Gubler believes higher living standards mean it is not likely to take off in these regions.

PRICING DECISION

For the middle classes of Latin America and Asia, an out-of-pocket purchase of a dengue vaccine probably seems affordable and worthwhile, especially for their children. Yet dengue takes its biggest toll among the poor, who lack money for immunization and are also less likely to get medical help when the disease leads to potentially deadly haemorrhagic fever.

Getting vaccine to them will need the involvement of international agencies like the GAVI Alliance, which provides routine childhood immunizations in poor countries with funds granted by public and private donors.

Nina Schwalbe, GAVI's managing director for policy and performance, says she is monitoring the dengue vaccine program closely but needs hard evidence that it offers value for money, based on public health impact, efficacy and price.

Sanofi is not ready to set a price before it sees the full clinical trial results and has a clearer sense of vaccine yields at its factory. But the drugmaker will embrace "tiered pricing" to make the product affordable, Barollier at the company said.

That has not stopped the guessing.

"I would expect, for middle-income countries, they would be looking at prices similar to those of other new vaccines - for example HPV (human papillomavirus), pneumococcal and rotavirus vaccines - which sell for $15 to $70 per course in countries like Brazil, South Africa, Venezuela and Thailand," said IVAC's Levine.

Setting the price will be a test for Sanofi Chief Executive Chris Viehbacher. He reckons his vaccine is about five years ahead of any others and he knows he has a major opportunity to boost his company's reputation by getting the roll-out right.

With no specific drugs to treat or prevent dengue - in contrast to malaria - the world needs a success. Likewise, Viehbacher's shareholders, who have seen the company lose top-selling drugs as patents expire, need a commercial winner.

They will be watching closely those results from Thailand in September.

($1 = 0.8089 euros)

(Additional reporting by Kate Kelland; Editing by Alastair Macdonald)

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