Big Year Unfolds for Sanofi-Aventis

In the next 12 months or so, Sanofi-Aventis (SNY Quote) faces several key events that could produce very good news for shareholders and patients -- or some very bad news for shareholders.

During this period, Sanofi-Aventis expects to hear from health regulators about an experimental obesity drug and an experimental insulin that patients can inhale, and it may hear from judges about patent challenges to some of its biggest-selling drugs.

This convergence of events will bring more visibility to a company that combines ubiquity of products with near-invisibility to many U.S. investors because few U.S.-based analysts follow the company. The average daily trade of 1 million shares of American depositary shares pales in comparison with average daily trades of Big Pharma and Big Biotech peers, as well as to the average daily trades of many mid-sized drugmakers.

Sanofi-Aventis' revenue from the U.S. market is greater than all but six drugmakers. Worldwide, it sells more drugs than any companies except Pfizer (PFE Quote) and GlaxoSmithKline (GSK Quote).

The company's $125 billion market capitalization makes it bigger than the combined market caps of Merck (MRK Quote) plus Bristol-Myers Squibb (BMY Quote). And, its stock price appreciation has outpaced the S&P 500, the Amex Pharmaceutical Index and the Amex Biotechnology Index over the last three months, six months, 12 months and 24 months.

Gaining Attention

The company attracted investors' attention when Sanofi-Synthelabo and Aventis merged last year. The next big headline should be the verdict from U.S. and European medical regulatory agencies about Acomplia, the anti-obesity drug.

Acomplia "could be the highest profile drug launch ... over the next 12 months," says Tim Anderson, of Prudential Equity Group, in a recent report to clients. Earlier this month, the company submitted its application to the Food and Drug Administration and its European counterpart. The company didn't provide details on precisely what the application covers, but Anderson says he believes Sanofi-Aventis will seek approval for treating both obesity and diabetes. Some tests suggest Acomplia could help some people stop smoking.