Biotech Values

[DewDiligence]

Re: Sanofi’s Acomplia

Welcome, Dave. You raise an excellent question.

Surely, long-term safety will be the paramount issue for the FDA when evaluating a drug like Acomplia that has the potential to be used chronically by tens of millions of people.

If SNY were a small-to-midsized biotech firm in need of Wall Street’s continual support for capital, I suspect that investors would have been privy to more of Acomplia’s preclinical data by now. However, for a BP like SNY (which now ranks third in global drug sales behind only PFE and GSK), keeping as much preclinical data as possible under wraps to avert tipping off competitors may make more sense than revealing these data.

I was long SNY until recently when I sold based on the rise in valuation. At 40+ I think the shares are fully-valued in light of the Plavix risk, modest as that may be.

Among the big pharma, I think PFE now offers a better value than either SNY or NVS, the other two BP’s I have owned in the not-too-distant past. Regards, Dew