PARIS Sanofi-Aventis (SASY.PA) shares fell as much as 1.7 percent on Tuesday as investors reacted warily to a U.S. health review of anti-obesity pill Acomplia, highlighting side-effects such as suicidal tendencies.
Notes by staff of the U.S. Food and Drug Administration, published on Monday, said patients who took Acomplia, also known as Zimulti, in clinical trials were more likely to suffer from suicidal thoughts or action than those on placebo.
The notes were posted prior to a meeting by health experts, as is customary, who will decide on Wednesday whether to recommend the drug to the FDA health regulator for marketing approval.
Analysts were divided on whether the advisory committee would back or dismiss the drug, which Sanofi hopes can help offset a slowdown in sales growth due to generic rivalry and measures by some governments to cut healthcare spending.
"Given other therapeutic options for weight loss and a lack of data to support clinical outcomes, non-approval is clearly a possibility," Deutsche Bank analyst Paul Mann said in a note.
Under a best-case scenario, which would include registration of patients taking the drug after marketing and warnings on the label, Deutsche Bank expected Acomplia sales to be below the consensus forecast of 1.5 billion euros ($2 billion) a year.
Sanofi in the past predicted annual sales of $3 billion for Acomplia. The drug won European Union approval in 2006. In some countries its reimbursement has remained limited; Germany marks it as a "lifestyle" drug, and so does not subsidize patients taking it.
Bear Stearns analyst Alexandra Hauber also sees Acomplia as a means for obese patients to shed weight rather than a drug for life-threatening diseases. A delay of its U.S. launch to 2009 would slice 3 percent of her 2008 Sanofi's earnings per share forecast.
"We believe the FDA is likely to be very cautious ... We expect the FDA will request further trials to evaluate the full profile of Zimulti," she said in a note, adding that patients on anti-depressants could be barred from also taking Acomplia.
Sanofi shares were down 1.3 percent at 1100 GMT taking its losses to 4.7 percent in 2007. The stock has underperformed the DJ Stoxx European health index .SXDP by 3.3 percent this year.
Dresdner Kleinwort analyst Ben Yeoh and Societe Generale analyst Marie-Helene Leopold advised investors in their notes to "buy" Sanofi shares, expecting the panel to recommend Acomplia.
SG predicted the panel to back Acomplia in very specific patients with the highest health risk, like obese and overweight patients with type 2 diabetes, and expected the panel to vote for a serious warning about risks to the central nervous system.
The FDA gave an approvable letter to Sanofi's Acomplia in February, asking the French drugmaker to provide it with more information about the drug. Initially Sanofi had hoped to launch the drug in the second quarter of 2006 in the United States.
"It's a very close call," JP Morgan's note said. "On the positive side, the FDA does conclude that Zimulti gives 'statistically and clinically meaningful weight loss', but must judge the risk-benefit with respect to the suicidality risk."