Sanofi-Aventis SA's Acomplia may be losing a head start in the race to market a new type of weight-loss drug as Merck & Co. and Pfizer Inc. push rival products through their labs.
Paris-based Sanofi anticipated Acomplia would win US Food and Drug Administration approval last year. The FDA delayed a decision until April, giving the world's biggest drugmakers more time to create similar medicines. Analysts expect the Sanofi pill to generate up to $7 billion in annual sales. Merck will seek approval for a competing product next year. Pfizer, the world's largest pharmaceutical company, and Bristol-Myers Squibb Co. are testing pills that work like Acomplia by blocking hunger signals in the brain. They're vying for a market worth $30 billion a year in the US alone. „Sanofi has lost a fair amount of time,” says Stephen Pope, head of equity research at Cantor Fitzgerald Europe in London. „Once they finally get their act together, they may find that their clothes have been stolen.” Sanofi, the subject of reports this week saying it may be interested in buying Bristol-Myers, is counting on Acomplia to drive future profit growth. The company faces generic competition on its best-selling medicine, the blood thinner Plavix, sold in the US by Bristol-Myers.
Bristol-Myers shares have surged about 10% this week after a French newsletter said the drugmaker may combine with Sanofi. The US company, which ousted its CEO four months ago, hired bankers to advise it should an offer be made, people familiar with the matter said January 30. „Sanofi faces three challenges,” said Andrew Fellows, an analyst at Helvea Ltd., in an interview today. „Generic competition on key drugs, key shareholders willing to sell, and the question mark over the delay of Acomplia in the US” Sanofi shares have shed 11% in the past 12 months and dropped 4.4% this week. They lost 10 cents, or 0.2%, to €67.35 at 3:36 p.m. in Paris today. Analysts anticipate French oil company Total SA and cosmetics maker L'Oreal SA, who control almost a quarter of Sanofi's shares, will sell their stakes. The world's third-largest drugmaker introduced Acomplia in Europe in July. Merck, based in Whitehouse Station, New Jersey, is right behind with its own medicine, called MK-0364, which uses the same pathways and produces similar side effects.
The drugs belong to a class of compounds called CB1 antagonists. They work through previously untried molecular pathways that may help patients shed more weight than older pills. The medicines block receptors that regulate hunger and food intake in the brain as well as directly on fat cells. Scientists who studied marijuana discovered the receptors in 1990 while trying to understand what caused pot smokers to get hunger pangs, dubbed „the munchies.” Pfizer has begun recruiting patients for the final phase of testing of its drug, known as CP-945598. The pill may bring in sales of $700 million by 2012, two years after hitting pharmacy shelves, according to Merrill Lynch & Co. The treatment Bristol-Myers and Solvay SA of Brussels are developing together, called SLV 319, has entered the second of three levels of tests needed for approval.
Most of these drugmakers need new products. Bristol-Myers reported a Q4 loss last week after sales of Plavix plunged when cheaper generic copies reached the market. The US company needs Plavix, which accounted for a third of 2005 revenue, to sustain earnings as it develops new treatments. Sanofi's sales fell in the third quarter. Pfizer, whose Lipitor best-seller also faces patent expiry, plans to eliminate 10,000 jobs, or 10% of its workforce. The industry hasn't introduced a new diet pill since 1998, when Roche Holding AG started selling Xenical, a drug that blocked the absorption of fat in the gut, causing annoying side effects such as diarrhea and flatulence. Xenical was one of the few prescription choices available, along with a BASF AG product called Meridia, until Sanofi introduced Acomplia last year. Meridia works on hunger like Acomplia, though it does so by stimulating the part of the brain that gives a sense of fullness, which can cause some patients to become dependent and suffer from higher blood pressure, according to the product's label. The drug is now sold by Abbott Laboratories.
Studies suggest Acomplia helps patients shed more weight than its predecessors - about 14 pounds in a year when it's combined with a low-calorie diet. The drug doesn't cause digestive disturbances or addiction, though it has been linked to side effects that include depression and mood swings. Acomplia „is the icebreaker,” said Donny Wong, an analyst at Decision Resources in London. „The obesity market is one of the most exciting in pharmaceuticals right now.” Sedentary lifestyles and fatty diets have caused the number of obese Americans to double over 30 years to a third of the population, according to government estimates. About 65% are considered overweight. In Europe, the number of obese has increased between 10% and 40% in a decade. „In the US alone, people spend about $30 billion a year on weight-loss products,” said Nick Turner, an analyst at Mirabaud Securities Ltd. in London. „People who are obese and desperate will pay out of pocket.” Turner and Wong say the new drugs may be reimbursed by insurers because they tackle more than just weight. Acomplia helps treat some of the ills associated with obesity, including diabetes and heart disease, by correcting cholesterol imbalances and lowering blood sugar. The benefits may overcome governments and insurers' reluctance to fund what has been considered a lifestyle problem. Acomplia, which sells for about €3 ($3.90) a day in Europe, costs little compared with hospital stays, analysts say. (Bloomberg)