Sanofi in $40 million settlement over obesity drug linked to suicidal thoughts

By Jonathan Stempel

NEW YORK (Reuters) - Sanofi SA has reached a $40 million settlement of a U.S. lawsuit accusing the French drugmaker of misleading investors about the safety of a weight loss pill that a U.S. regulatory panel linked to suicidal thoughts.

The all-cash settlement was disclosed in a court filing on Thursday, and requires approval by U.S. District Judge George Daniels in Manhattan.

It resolves claims that arose after a U.S. Food and Drug Administration advisory committee on June 13, 2007 urged that the agency reject Sanofi's drug rimonabant, known by the trade names Acomplia and Zimulti, on concern that using it could increase suicidal thinking and depression.

Sanofi is the world's fourth-largest pharmaceutical company as measured by prescription drug sales. European regulators had approved use of rimonabant prior to the FDA panel action, but sales were later suspended.

Plaintiffs led by the Hawaii Annuity Trust for Operating Engineers accused Sanofi of touting the drug as a possible "blockbuster" to treat obesity, with only mild side effects.

But they said Sanofi concealed clinical tests that showed a statistically significant increase in "suicidality" among people taking the drug.

The release of the advisory committee recommendation caused Sanofi's shares in Europe and American depository receipts in the United States to fall in price.

Thursday's settlement covers investors in Sanofi ADRs between February 24, 2006 and June 13, 2007, and equates to about 37 cents for each of Sanofi's roughly 108 million ADRs at the time.

It also resolves claims against Gerard Le Fur, the former chief executive, and Hanspeter Spek, an executive vice president of pharmaceutical operations, court papers show.

"The settlement, in light of all the risks, was exceedingly fair, and represented a high percentage of the total damages suffered by the class," said Tor Gronborg, a partner at Robbins Geller Rudman & Dowd who represents the plaintiffs, in an interview.

Sanofi did not immediately respond to requests for comment.

The plaintiffs' law firm plans to seek a fee of $11 million, or 27.5 percent of the settlement amount, court papers show.

The case is In re: Sanofi-Aventis Securities Litigation, U.S. District Court, Southern District of New York, No. 07-10279.

(Editing by Eric Walsh)

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UK cost agency questions benefits of Sanofi MS pill

LONDON (Reuters) - Britain's healthcare cost watchdog wants more information from Sanofi on the effectiveness of its new multiple sclerosis pill Aubagio before deciding if it should be used on the state health service.

The National Institute for Health and Clinical Excellence (NICE), which decides if drugs should be paid for by the system, said on Wednesday it had asked the French drugmaker's Genzyme unit to come up with additional information by October 8.

Sanofi has already offered to provide Aubagio at a discount to the National Health Service. The drug's list price is 13,529 pounds ($21,600) per patient a year but the size of the discount has not been disclosed.

NICE, whose decisions are monitored by health authorities around the world, has a reputation for taking a tough line when deciding if new medicines offer value for money.

Aubagio is one of two new multiple sclerosis (MS) drugs that Sanofi is hoping will drive future sales growth. Its injectable treatment Lemtrada was approved by the European Commission on Tuesday.

(Reporting by Ben Hirschler; Editing by Louise Heavens)

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Sanofi could acquire L'Oreal's stake, buy more of Regeneron

By Natalie Huet and Ben Hirschler

PARIS/LONDON (Reuters) - Repurchasing L'Oreal's 9 percent stake in Sanofi might make sense for the French drugmaker if the $12 billion holding is put up for sale, Sanofi's chief executive said on Friday.

Chris Viehbacher told an investor conference the group had the resources to do "opportunistic" share buybacks, as well as making bolt-on acquisitions and potentially increasing its stake in U.S. biotech firm Regeneron Pharmaceuticals.

Shares in Regeneron jumped more than 5 percent to an all-time high of $288.50 in New York after his comments, also buoyed by Lazard Capital Markets and RBC raising their price targets for the stock. Sanofi and L'Oreal shares were little changed.

Speculation over the fate of L'Oreal's stake in Sanofi has been fuelled by last month's comments from L'Oreal's CEO that the cosmetics company could buy back the 23-billion-euro ($30-billion) stake Nestle holds in it if L'Oreal in turn sold the 9-billion-euro stake it owns in Sanofi.

The comments have weighed on Sanofi shares, already dragged down by disappointing quarterly results, but some analysts say the drugmaker could use the opportunity to repurchase the shares with cheap debt, thereby boosting its earnings.

Asked about his potential interest in buying back L'Oreal's stake from next year, Viehbacher said it was difficult to comment because the issue was highly conditional.

"We certainly have cash flow to do some things," he told a Bank of America Merrill Lynch healthcare conference in London.

"Whether we would intervene in that or not is going to be a function of - if it does happen - what at that given point in time is the best use of capital. It may well be opportune to have a look at it."

Restrictions on Nestle selling its L'Oreal stake end in April.

More generally, Viehbacher said he did not exclude other share buybacks, but said these would depend on opportunities for acquisitions.

He said Sanofi could also look at raising its stake in Regeneron to as much as 30 percent. Sanofi holds about 16 percent of Regeneron and said in February it has the right to increase this to a maximum 30 percent under its decade-long partnership with Regeneron.

"The Regeneron relationship has become extremely productive for us," Viehbacher said. "Over time, it could well make sense to build our stake up to 30 percent. How fast we do that, whether or not we do that is a function of a number of different factors - but it is a bulky chunk of money to use."

Regeneron's market value is about $27 billion.

Regeneron is best known for its eye drug Eylea, co-marketed with Bayer. But it has also successfully developed the cancer treatment Zaltrap with Sanofi and is working with the French group on a new kind of cholesterol drug.

The drug, which is in late-stage trials, has cut levels of "bad" LDL cholesterol by 60 percent through a new mechanism - blocking a protein called PCSK9.

(Editing by Louise Ireland and Bob Burgdorfer)

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