Sanofi Divulges Details Carefully

Executives say they expect to launch Acomplia sometime during the second half of this year.
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Executives of

Sanofi-Aventis

(SNY) - Get Report

say they expect to launch their highly touted and greatly anticipated weight-management drug Acomplia during the second half of this year.

Aside from providing a few bits of information, the officials on Friday parried questions from analysts about a drug that many had predicted could be an annual multibillion-dollar seller in a few years and for several uses.

Some of the enthusiasm was

dampened last week when the Food and Drug Administration granted conditional approval for Acomplia as a weight-management drug and rejected it as a stop-smoking treatment.

Conditional approval can signify a delay of a few months or considerably longer, but Sanofi-Aventis officials provided little additional information from last week's terse press release.

The FDA didn't ask for more clinical trials for Acomplia as a weight-management drug, said Gerard Le Fur, senior executive vice president for medical and scientific affairs. He made the comments during a conference call with analysts to discuss last year's performance and 2006's prospects.

However, he said the FDA's rejection letter for Acomplia as a smoking-cessation treatment did contain a request for another clinical trial.

Le Fur refused to provide details, declined to say if the company would pursue the clinical trial and wouldn't say how long such a clinical trial would take. "We will meet with the FDA in the coming weeks," he said.

He and other executives continued to refer to the drug by its generic name, rimonabant, because Sanofi-Aventis hasn't received trademark clearance for the Acomplia brand name, Le Fur said. That will be one of the subjects to be discussed with the FDA, he said.

A second-half launch for Acomplia as a weight-management drug "is the most probable launch period we can estimate from today," added Hanspeter Spek, executive vice president for pharmaceutical operations. The company also plans to launch the drug in several European markets later this year, including Germany and the U.K.

The company's news release last week about the FDA's decision, coupled with

a recent skeptical editorial about Acomplia in the

Journal of the American Medical Association

prompted some analysts to speculate about a lengthy FDA review.

Earlier this week, Amit Roy of Citigroup cut his rating on Sanofi-Aventis to sell from hold. Roy told clients in a Feb. 20 report that the FDA's conditional endorsement, known as an approvable letter, could mean many things. If the agency issued a Class 1 approvable letter, it could act within two to four months after the company answers questions, Roy says. But if it issued a Class 2 letter, the FDA could request that a panel of experts be convened, causing at least a six-month delay after the company resubmits its application.

Roy, who doesn't own shares, believes the agency will request an advisory committee hearing. His firm has had a noninvestment banking relationship with Sanofi-Aventis.

Company executives declined to tell analysts whether they expected an advisory panel to meet, when they would discuss the meeting with the FDA and whether to seek other indications for the drug. A follow-up version to rimonabant is currently in midstage clinical testing. Clinical trials on rimonabant are continuing to assess the drug's effect on diabetes, cholesterol and cardiovascular problems.

Acomplia is important because the company is starting to suffer from generic competition for big drugs, such as the antihistamine Allegra, which had $1.68 billion in worldwide sales last year, and the diabetes medication Amaryl, which enjoyed $846 million. Generic competition also eroded sales of Arava for rheumatoid arthritis and for the antidiuretic DDAVP.

Despite the impact of generics, the company was able to post an 8.4% gain in revenue last year, to $34.1 billion. Adjusted net income rose 26% to $7.92 billion, while adjusted earnings per share rose 26% to $5.93. The company predicted a roughly 10% increase in adjusted earnings per share for 2006.

The adjusted figures exclude charges related to the merging in 2004 of

Sanofi-Synthelabo

and

Aventis

, as well as restructuring costs. When all one-time items are included, the company earned $2.82 billion, or $2.11 a share, last year. For 2004, the company reported pro forma earnings of $6.28 billion, or $4.71 a share.