The UK’s Acambis has signed a licensing agreement with a unit of Sanofi-Aventis for its experimental vaccine to fight Japanese encephalitis, a mosquito-borne virus.

Under the terms of the deal with Sanofi Pasteur, Acambis will receive upfront and milestone payments of up to 30 million euros and give its partner marketing, distribution and certain manufacturing rights to the ChimeriVax-JE vaccine worldwide, excluding India and the Indian subcontinent, where Acambis has an existing agreement with Bharat Biotech International. Sanofi Pasteur had been previously granted an option for rights to the vaccine in the USA.

Acambis has already established a large-scale manufacturing process at its facility in Canton, Massachusetts, USA, from which it will supply Sanofi Pasteur with bulk ChimeriVax-JE vaccine and will receive payment for that supply as well as royalties on future sales of the finished vaccine.

Japanese encephalitis is caused by a flavivirus transmitted by mosquitoes and in about one of every 200 cases, the illness progresses to inflammation of the brain, with more than half of those ending in permanent disability or death. Approximately 30,000 to 50,000 people suffer from Japanese encephalitis annually, mainly in Asia, and during a recent epidemic in northern India and Nepal, it killed more than 1,200 people, most of them children.

Acambis recently published positive data from its Phase III trial

which included a 2,000 patient safety study and an 800-patient efficacy trial in which a single dose of the vaccine was compared to a three-dose regimen of an already-marketed product called JE-VAX made by Sanofi Pasteur and the latter’s chief executive, Dave Williams, said “we believe a single-dose vaccine will hold significant advantages for use in routine immunisation programmes in a region where several billion people live.”

Signing up with world’s biggest vaccines manufacturer looks a good deal for Acambis and observers believe that a product will be on the market by 2009. ChimeriVax-JE is an important new product for Acambis, which needs to find new revenue streams after it fell out of the running in November for a lucrative contract to supply smallpox vaccines to the US government.

Future competition could come from Novartis which secured the rights last summer to a vaccine against Japanese encephalitis, developed by Austrian company Intercell.