Will Sanofi's Wonder Drug Save the Day?

Its multitask drug Acomplia is aimed at helping people lose weight, control cholesterol, and even stop smoking. And it comes at a crucial time

by Kerry Capell

On Nov. 20, the U.S. government awarded Sanofi-Aventis a $118 million contract to supply 3.7 million doses of its new bird-flu vaccine. For the world's third largest drugmaker, it's a rare bit of good news in an otherwise difficult year.

The Paris-based pharmaceutical giant faces a litany of problems. Generic competition in the U.S. and health-care reforms in Europe are eating into Sanofi's (SNY) bottom line. On Oct. 31, the company posted weaker than expected third-quarter results, with sales down 4.2%, to $8.8 billion, and profits down 12%, to $2.2 billion. Sanofi's shares are off 9.4% year-to-date.

Sluggish sales and swooning shares are the least of Sanofi's worries, though. One of its newer drugs—antibiotic Ketek—is under intense scrutiny from the U.S. Food & Drug Administration after it was linked to a dozen cases of acute liver failure, including four deaths. The drug also is at the center of a U.S. congressional investigation into allegations that it was approved despite the FDA's own findings that a key study contained fraudulent information.

Craving Block

As if all that weren't enough, FDA approval for the company's long-awaited anti-obesity treatment, Acomplia, has been delayed until next spring. "It's just the latest setback for a volatile company that's struggling with a lot of issues," says Navid Malik, a pharmaceutical analyst with London-based brokerage Collins Stewart.

With troubles mounting, Sanofi is under intense pressure to get Acomplia onto the U.S. market—fast. Hailed by analysts as a potential multibillion-dollar blockbuster, Acomplia is critical to the company's future growth. Also known as rimonobant, the drug is the first in a new class of medicines that curtail cravings by blocking receptors known as cannabinoid type 1 (CB1) found in the brain and in fat tissue. CB1 receptors influence hunger and addictions, such as to nicotine.

Clinical trials indicate that Acomplia not only could help people lose weight but also shrink abdominal fat and help them stop smoking. Even more remarkably, it can also improve cholesterol levels and blood-sugar control. That means Acomplia might also someday be used in treating diabetes, though approval for that application remains years off, pending results of tests now under way.

European Spread

Some analysts believe Accomplia has the potential to go even further. Sanofi-Aventis hopes it will become the first drug approved for the treatment of metabolic syndrome, a combination of abdominal fat, high blood pressure, high blood-fat levels, low levels of HDL cholesterol, and high blood-sugar levels, all of which contribute to cardiovascular disease. "This isn't just a diet drug but potentially a significant advancement in cardiovascular treatment," says Sanford Bernstein pharmaceutical analyst Gbola Amusa.

Acomplia got the green light as a treatment for obesity from European regulators in June. Since then, Sanofi has introduced the drug in six European Union countries: Britain, Denmark, Finland, Ireland, Germany, and Austria, as well as Norway and Argentina. Sanofi says demand for the drug is strong, with sales in the three months to Sept. 30 of $14 million. The drug is selling exceptionally well in Britain, Sanofi says, putting it on par with the country's top six drug launches.

But the real money is in the U.S., which is expected to account for two-thirds of the potential market. In February, shortly after Sanofi confidently predicted the FDA would grant approval by yearend, the FDA said it needed more information. Since then, Sanofi has refused to disclose the nature of the FDA's concerns or the expected timing of approval.

Side-Effect Concerns

"We will not speculate at all what the FDA now has to do or will do and within which timeline," said Hanspeter Spek, head of pharmaceutical operations, during an Oct. 31 conference call.

Sanofi's silence has led many to question whether the FDA is worried about side effects. There are no long-term studies yet of the effects of interfering with this part of the brain. Although the company says side effects such as nausea and depression are mild and short-lived, European regulators have had reports of a dozen cases of psychiatric disorders in Acomplia patients, including six incidences of major depression.

"I'm not convinced the side effects, especially the psychiatric ones, are as minor as the company claims," says Collins Stewart's Malik. Like most analysts, he anticipates Acomplia eventually will be approved by U.S. regulators. But he cautions that in the post-Vioxx era, and with current concerns over Sanofi's Ketek, approval may come with conditions. "The FDA may take a tough line and restrict the way and to whom the drug is marketed," he says. That's a risk Sanofi can ill afford.

Capell is a senior writer in BusinessWeek's London bureau .