A Slow Death for the 'Blockbuster of Blockbusters'
By Rob Fannon, editor, Phase 1 Investor
June 22, 2007
Lose weight, quit smoking, improve cholesterol, and treat diabetes… all in one pill…
That was the promise of Acomplia, the wonder drug under development by French pharmaceutical company Sanofi-Aventis (SNY). Many had projected sales over $5 billion per year… calling it the "blockbuster of blockbusters."
Last week, an FDA advisory panel returned a landslide 14-0 ruling against the drug, likely penning the final chapter in this drug fairy tale. The FDA's official decision isn't due until July 26. But barring a miracle, the chances for a happy ending are slim to none.
Acomplia was the first in a new class of drugs designed to curb appetite signals in the brain. The cannabinoid receptors are the target… the same receptors that give marijuana smokers the munchies. Yet, like so many other central nervous system drugs, potential side effects are a crapshoot.
The big red flag for the FDA was Acomplia's tendency to cause psychiatric problems, including suicide, depression, anxiety, and sleep disorders. It's important to note these were seen in patients already pre-screened for potential mental health problems. The FDA had major concerns about the drug's use in a wider patient population. I don't blame them…
According to the panel report, there were a number of reports of "delusional symptoms… psychotic behavior… and aggression," including a man who attempted to strangle his daughter and another case of spousal abuse.
The ruling only increases the dark cloud hanging over drugs that target the cannabinoid receptors, also called "CB-1" drugs. Sanofi-Aventis had already received a non-approvable letter for Acomplia's anti-smoking indication, and earlier safety concerns pushed this latest ruling back almost two years.
Big Pharma giants Merck (MRK) and Pfizer (PFE) each have CB-1 weight-loss drugs in the pipeline. Pfizer's drug is the most advanced with a 4,000-patient Phase III clinical trial planned. We'll see how this plan moves forward from here…
Acomplia's troubles are the latest example of the drug industry's failure to strike it rich in the untapped obesity market. With roughly two-thirds of the United States overweight or obese, a successful weight-loss drug could be the industry's biggest seller yet.
But, for now, Wall Street has soured on weight-loss drugs… even the ones that have no direct correlation to Acomplia and the marijuana-munchies receptor.
Right now, one California biotech company is on the heels of critical safety data that will firmly place its drug as the best diet pill in the industry. It targets a completely unrelated receptor in the body. Yet, the market has punished the stock recently because of Acomplia's woes.
Typical. Wall Street doesn't take the time to dive into the science. If it did, this company's stock would've moved as much in the opposite direction.
I welcomed Sanofi-Aventis' failure. Phase 1 subscribers are sitting on handsome gains since we've recommended the rival stock last year. But I believe the best is yet to come. The Acomplia debacle will only add to the acquisition premium or collaboration deal this company will get come this fall… after all, we're targeting the blockbuster of blockbusters here.
Good investing,
Rob Fannon
Editor, Phase 1 Investor
