Change at the top

This week has seen real drama in the boardroom of Sanofi-Aventis, the company that manufactures the weight loss medication Acomplia so popular in Europe. This company is the third largest pharmaceutical manufacturer by sales in the world. After reports of discord at the top and rumors of a shareholder revolt by Total and L'Oreal, the CEO has stepped down and has been replaced by a senior executive headhunted from GlaxoSmithKline.

It will be interesting to see whether replacing the leader can turn the company round. For all that it is currently the third largest company, its share value has been falling because many of its existing drugs are facing challenges from generics. Although new drugs are protected from competition during the patent period, competing manufacturers are lining up with generic equivalents in each territory as the patent periods expire. The launch of cheaper generics cuts the original manufacturer's revenue overnight. Up to now, all the major companies have overcome this problem by launching new products on a regular basis. But, for the last few years, not many new drugs have come through Sanofi-Aventis' research and development pipeline. Worse, the company failed to persuade the FDA to licence the sale of Acomplia in the U.S. market. This means its profitability could nosedive over the next year or so unless new products can be brought to market soon.

As it is, the new CEO will have to make decisions about Acomplia for the U.S. market. On paper, the company has everything ready for the licensing application to be renewed with the FDA. They have registered Zimulti as the brand name for the U.S. market, and new clinical trials are underway to produce better evidence for the FDA to consider. In one sense, history makes the initial decision by the FDA slightly difficult to understand. The drug has more than proved its safety and effectiveness in the European market where it is strongly favored as the standard treatment in the fight against the epidemic of obesity. Had the safety concerns raised by the FDA been justified, the European regulatory authorities would have withdrawn the drug as reports of adverse side effects streamed in. Yet the reverse has happened with no reports of side effects and countries strongly advocating its use among the overweight. That leaves the FDA with no modern drugs to fight the growing problems of obesity in the U.S.

To learn what John Scott has to say about other things and look on the things from his point of view, visit http://www.newageweightloss.com/blog/change-at-the-top.html where he frequently writes on many different subjects that you will find fascinating.