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Biotech / Medical : ACADIA Pharmaceuticals Inc (ACAD)
ACAD 25.04+0.9%Nov 28 9:30 AM EST
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From: scaram(o)uche2/21/2006 4:18:44 PM
   of 588
 
forbes.com

(snip)

Sanofi led shares lower, dropping 1.90 eur or 2.57 pct to 72.00 in heavy volume after its would-be wonder-drug Rimonabant suffered a double blow at the hands of US drugs regulator the FDA.

Late on Friday, the company announced that the FDA had only issued an 'approvable' letter regarding anti-obesity treatment for rimonabant, also known as Acomplia.

At the same time, the FDA issued a non-approvable letter for using rimonabant as an anti-smoking treatment. Although this potential use is minor when compared to the anti-obesity treatment, analysts said the regulatory setback could damage the company's management credibility.

'This response from the FDA resembles a repudiation for the French laboratory, which until just recently said it was confident of its chances for a launch of the product in the second quarter,' said analysts at Raymond James in Paris, who cut their rating on the stock to 'fair value' from 'buy.'

Several analysts said the launch delay for anti-obesity treatment could be six months or more, but the FDA has not specifically identified its concerns with the drug, and so investors are hoping the company can provide further information on Friday, when Sanofi will hold an analyst meeting alongside its release of 2005 earnings.

Morgan Stanley said that in a worst-case scenario, the FDA could require 'prolonged efficacy or safety trials that would delay launch until after 2009' but kept its 'overweight' rating on the stock.

The shares were cut to 'sell' from 'hold' at Citigroup.

(snip)
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