Tags: Sanofi | Setback | Clouds | Future | Obesity | Drugs

Sanofi Setback Clouds Future of Obesity Drugs

Thursday, 14 June 2007 12:00 AM

NEW YORK - A U.S. health panel's resounding rejection of Sanofi-Aventis' obesity drug Zimulti casts a pall over other experimental products in the same class while offering a stark reminder of challenges facing the development of weight-loss medications.

The Food and Drug Administration advisory panel on Wednesday unanimously recommended Zimulti not be approved because of concerns it may increase suicidal thinking and depression. The FDA is expected to make a final decision by July 26.

"The bar for approval in the area of obesity has been raised," Bank of America analyst William Ho said of the ruling in a research note.

Analysts said on Thursday the panel's stance bodes poorly for Pfizer Inc. and Merck & Co., which are developing drugs in the class known as CB-1 antagonists.

"We expect that large pharma companies developing CB-1s may now look more closely at their development programs," Leerink Swann analyst Seamus Fernandez said in a research note, adding the outlook for the class is "questionable."

The problem of obesity in the United States and elsewhere has drawn the pharmaceutical industry to this potential gold mine, but companies have struggled to develop successful products. Tackling obesity is seen as a priority because of its links to heart disease, diabetes and other health concerns.

Most notably, drugmaker Wyeth withdrew drugs in its fen-phen diet-pill combination a decade ago over safety concerns. Roche's Xenical never lived up to initial blockbuster sales hopes. GlaxoSmithKline launched a nonprescription version of Xenical this week under the brand name Alli.

French drugmaker Sanofi, whose shares were off 6 percent in Paris, is selling its drug in 18 other countries under the brand name Acomplia. Sanofi has in the past forecast peak annual sales of the drug, known generically as rimonabant, of at least $3 billion. The CB-1 drugs are designed help people lose weight by blocking food craving signals in the brain. They target cannabinoid receptors, the same signals that trigger intense hunger after marijuana use.

Morgan Stanley analyst Jami Rubin said in a research note that little data are available on the products from Merck and Pfizer, but that studies done prior to human testing have pointed to evidence of toxicity. Rubin called the panel's vote "clearly a negative" for the entire class. Pfizer, the world's largest drugmaker, is urgently trying to find new products after it canceled testing for its most important experimental drug, the cholesterol drug torcetrapib, because of safety concerns.

As of December, Pfizer's CB-1 antagonist, CP-945598, was one of eight drugs the company had in Phase 3 testing for various conditions, according to its Web site.

The company has an extensive Phase 3 program planned for the drug, including more than 4,000 patients, according to Leerink's Fernandez.

However, for purposes of rating Merck and Pfizer stock, neither Fernandez nor Rubin has been including sales for the companies' obesity products in projecting future financial results.

Pfizer shares rose 10 cents to $26.45 in morning trading on the New York Stock Exchange. Merck shares fell 44 cents, or less than 1 percent, to $50.23.

Shares of smaller Arena Pharmaceuticals Inc., which is also developing an obesity drug, were off 3 percent. Arena's drug, lorcaserin, targets a different receptor in the body. Bank of America's Ho said the higher standards could negatively impact Arena's ability to commercialize lorcaserin."

Other companies stood to benefit. The panel's ruling suggested that Byetta will remain the only new drug that causes weight loss for a large portion of diabetes patients, according to Friedman Billings Ramsey analyst Jim Reddoch.

Shares of Byetta's makers Amylin Pharmaceuticals Inc. and Eli Lilly and Co. were up about 3 percent and 1 percent, respectively.

"Rimonabant could have been competitive in the overweight Type II diabetes population," Reddoch said in a note, referring to the most common form of the disease.

© reuters 2007. All Rights Reserved.

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NEW YORK - A U.S. health panel's resounding rejection of Sanofi-Aventis' obesity drug Zimulti casts a pall over other experimental products in the same class while offering a stark reminder of challenges facing the development of weight-loss medications. The Food and...
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Thursday, 14 June 2007 12:00 AM
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