Sanofi-Aventis (SNY) saw its shares sag Tuesday on the heels of disappointing regulatory news about the French company's experimental drug Acomplia.
On Friday, after the markets had closed, Sanofi-Aventis said the Food and Drug Administration rejected Acomplia as a smoking-cessation treatment and gave conditional approval for the drug as a weight-loss medication. In a three-sentence press release, the company didn't identify the conditions or set a timetable for meeting the conditions. "Sanofi-Aventis will continue to work in close collaboration with the FDA," the company said. U.S. investors, coming off a long holiday weekend, choked on the news, sending the stock down 2.7% to $43 by midafternoon on triple the average daily volume for the last three months. Conditional approvals, known as "approvable letters," aren't rare, especially if a product, such as Acomplia, is the first of a new class of drugs. If approvable letters require more information about existing data or greater discussions about a drug's label, the FDA's clearance can be granted in several months. But if the agency wants more clinical testing, the delay could last for several years. The FDA's action creates "substantial uncertainty over what is considered Sanofi's most important pipeline asset," says Alexandra Hauber of Bear Stearns in a Feb. 20 research report. "The next steps are difficult to handicap in the absence of further information from Sanofi." Hauber has a peer-perform rating on the stock. She doesn't own shares, but her firm has had a recent noninvestment-banking relationship with the company.Boding Ill
Company executives can expect a grilling from analysts on Friday when they present fourth-quarter and full-year 2005 financial results and, perhaps, offer guidance for 2006. Until then, analysts are doing their best to read the tea leaves. Hauber noted that the company, in its statement, referred to Acomplia as a "weight management" drug. This definition "doesn't bode well for an indication beyond weight loss, such as a treatment for metabolic syndrome," she says.TheStreet Premium Services For Personal Service: 877-471-2967
Jim Cramer's Action Alerts PLUS:
Trade right alongside a Wall Street pro — enjoy access to his Charitable Trust portfolio and be sent trade alerts BEFORE he makes a move. Learn MoreETF Profits:
Get money-making ideas from the hottest investment vehicle on the planet. Our experts show you how to play various ETF sectors to help pump-up your portfolio. Learn MoreOptionsProfits:
Get 50+ trade ideas a week from the industry's top options experts. Plus — exclusive commentary on market trends and essential trading tools. Learn MoreReal Money:
Our team of professional Wall Street Pros — including Jim Cramer, Doug Kass, and Nicholas Vardy — delivers intelligent analysis, timely trade ideas, and colorful commentary. Learn MoreStocks Under $10:
Break into the market with small- and mid-cap stocks... all $10 or less! David Peltier tells you exactly which low-priced stocks he's buying and selling. Learn MoreTo begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
blog comments powered by Disqus
| Dow Jones | S&P 500 | NASDAQ | 10-Year Note | |
|---|---|---|---|---|
| 12,801.23 | 1,342.64 | 2,903.88 | 19.69 |
Oil *
117.67
|
|
DOWN
89.23 |
DOWN
9.31 |
DOWN
23.35 |
DOWN
0.78 |
10 Yr
1.97%
SPDR Gold
167.14
|
|
-0.69%
|
-0.69%
|
-0.80%
|
-3.81%
|
Data delayed 20 minutes |

Connect with TheStreet