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[DewDiligence]

Sanofi Updates Investors on Drug Pipeline

[SNY is holding its annual R&D presentation today.]

http://www.reuters.com/article/marketsNews/idUKL1773120620070917

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Mon Sep 17, 2007 2:45am EDT
By Ben Hirschler, European Pharmaceuticals Correspondent

PARIS, Sept 17 (Reuters) - Sanofi-Aventis (SNY) said on Monday its pipeline of late-stage experimental drugs was expanding but a drug for Alzheimer's disease, which analysts had viewed as risky, failed to show significant effect in studies.

The world's third-largest drugmaker said it now had 48 projects in advanced clinical trials -- Phase III or Phase IIb -- and could potentially make 31 submissions for approval with regulators by the end of 2010.

Pressure on the French group has increased since June, when its key anti-obesity drug Acomplia, known as Zimulti in the United States, was rejected by a U.S. expert panel.

That setback triggered the biggest share fall in five years and left many investors sceptical about the ability of Sanofi's management to deliver on its pipeline.

Sanofi said it aimed to submit Acomplia worldwide as a treatment for type 2 diabetes in 2009.

"I'm confident in Acomplia because it is a unique product," research head Marc Cluzel told reporters before an R&D presentation.

Like many large pharmaceutical companies, Sanofi badly needs to launch new medicines to replace older ones facing patent expiry. By 2012, most of the group's key products will lose patent protection, including its two top-sellers, the blood-thinner Plavix and anti-thrombotic Lovenox.

Sanofi has a relatively large line-up of experimental drugs, but its high patent risk and poor recent track record means the stock carries a lowly rating, trading on just 11 times expected 2008 earnings against a European sector average of more than 14.

Cluzel, however, said the portfolio was starting to mature.

"We were a little bit high risk in the past. The risks have started to be mitigated because we have more (clinical) results ... we have the fuel for growth after 2010," he said.

The company's extensive research update was mostly positive but there were setbacks.

A follow-up to Lovenox, AVE5026 [#msg-17021384], showed potentially greater efficacy than Lovenox in Phase IIb trials and a new sleeping pill, a follow-on to Ambien called eplivanserin, is scheduled for filing in 2008.

Sanofi also announced good Phase IIb results for AVE0010 in diabetes -- a similar drug to Eli Lilly's (LLY) Byetta -- and for saredutant , a new antidepressant, which has a better side effect profile than current drugs, especially on sexual function.

Another antidepressant, amibegron, showed less good results and a potentially worrying liver side effect signal. That leaves its future unclear, although clinical trials will continue.

Alzheimer's treatment xaliproden failed to work in this condition but is still being investigated in reducing pain linked to chemotherapy.
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