What's a drug maker to do? Get a new product to market, and you might get sued by patients over side effects. See a product fail the approval test, and it's investors who hit the streets with torches and pitchforks.
Witness Sanofi-Aventis, which just got slapped with a purported class-action lawsuit on behalf of an institutional investor. The product in question: Acomplia, a weight-loss drug rejected by the FDA in June. The investor alleges Sanofi hid data that showed Acomplia could cause depression. Thus stock-buyers were misled into thinking the drug could be a blockbuster, netting millions for the company and, in turn, boosting share price. Instead, Sanofi expects a four-year delay before gaining FDA approval.
Meanwhile, Acomplia is approved for obesity in the EU, and regulators there will allow some positive data from a type 2 diabetes trial to go onto its label now. Sanofi says it plans to ask regulators in 2009 to approve the drug for type 2 diabetes.