Sanofi shares fall as FDA delays anti-obesity drug
|
|
Sanofi-Aventis shares fell as much as 4.5 percent on Monday after U.S. regulators delayed final approval of its experimental anti-obesity pill Acomplia, which is among the world’s most keenly awaited new drugs.
A spokesman for the world’s third-largest drugmaker said a final decision was expected in the next few months, but some analysts do not now expect it to reach the market until 2007.
Sanofi had previously said it was confident it could launch Acomplia in the second quarter of 2006, predicting it could eventually generate annual sales of around $3 billion.
U.S. health authorities issued an “approvable” letter for Acomplia on Friday, asking Sanofi for more information on the drug before granting it marketing clearance for the treatment of obesity.
The Food and Drug Administration also declined to approve the pill as an aid for quitting smoking.
The United States, the world’s largest drug market, is the first to assess the novel medicine, which works by switching off the brain circuits that make people hungry when they smoke cannabis.
Ben Yeoh, an analyst at Dresdner Kleinwort Wasserstein, said he did not now expect Acomplia to hit the market until 2007. Its rejection for smoking cessation was a further negative, although sales in this area would only have been up to 500 million euros ($597 million), he added.
Sanofi shares pared initial losses to stand 2.8 percent lower at 71.80 euros by 1020 GMT, after an earlier low of 70.60.
WHAT WILL LABEL SAY?
Some analysts downgraded the stock. Citigroup cut its recommendation to “sell” from “hold” and its target to 68 euros from 75 euros, while Oddo Securities reduced its rating to “add” from “buy” and share price target to 84 euros from 90 euros.
Others were less gloomy.
“I think the market will realise no additional clinical studies might be needed in order to secure final approval of the drug in obesity, so I think the shares will recover,” WestLB analyst Oliver Kaemmerer said, predicting a possible launch in the third or fourth quarter of 2006.
Andrew Baum of Morgan Stanley said Acomplia was likely to gain U.S. approval “within the next 18 months or less” and that such a delay would have a modest valuation impact on the stock.
More important than the timing, for many analysts, will be the final label on the drug, setting out how and when it should be used—a factor that will be crucial in determining its commercial potential.
Sanofi would like to be able to claim on the label that Acomplia offers a range of cardiovascular benefits, following clinical trials suggesting it reduces several risk factors linked to heart attacks and strokes. But it remains unclear whether this will be accepted by the FDA.
Bear Stearns analyst Melissa Bearchell said the fact Acomplia’s approvable letter simply referred to its use in “weight management” did not bode well for claims of broader benefits.
Mike Ward of Nomura Code Securities said Sanofi management’s credibility had been damaged by the FDA decision, after executives were so confident about an early launch.
Oddo Securities analyst Francois-Regis Breuil agreed: “Today there’s less of a tendency to trust the group.”
Sanofi also faces legal patent challenges in the United States to its blood thinner Plavix, among its key-selling drugs as generic drug makers are seeking to sell cheaper copies of the drug.
The stock may recover from the FDA’s decision on Acomplia, some analysts said, but the Plavix trial, slated for the beginning of April, could push the shares either way.
Print Version
Tell-a-Friend comments powered by Disqus
