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Multaq Meltdown: Heart Flutter Drug Actually Causes Heart Failure, FDA Says

The FDA's warning to doctors that the Sanofi (SNY) drug Multaq can double the risk of the heart flutters it is intended to prevent will doubtless kill the product completely. In truth, it was already keeping its head above water; it sold just €65 million in Q1 2011.

That's a respectable sum, but not enough to pay back the roughly $1 billion it can take to develop and launch a new drug. Back in October 2009, Wall Street had delusional beliefs about Multaq's sales potential. Here were the peak revenue estimates from several banks, according to this Reuters story:

  • Sanofi forecast annual sales of more than €1 billion ($1.32 billion).
  • Morgan Stanley estimated €3 billion.
  • Citi estimated €1.5 billion.
  • UBS said €1.4 billion.
  • The consensus was about €1 billion.
Here were the actual sales:
  • Q1 2011: €63 million
  • FY 2010: €172 million
  • FY 2009: €25 million
  • Actual total: €260 million
(Kudos to Corey Davis of Jefferies International, who, unlike his colleagues, marked down the drug as no more than a niche product because the entire U.S. market for atrial-fibrillation products was just $324 million.)

The FDA's warning is hugely embarrassing for Sanofi. The drug is approved for "persistent atrial fibrillation (AF) or atrial flutter (AFL)," yet the company's own study -- on which the FDA's warning is based -- found a two-fold risk of death, stroke and hospitalization for heart failure. The FDA said:

Do not prescribe Multaq to patients with permanent atrial fibrillation.
There's a difference between persistent and permanent atrial fibrillation, but the former if untreated often leads to the latter. It wasn't even priced right -- Sanofi attempted to sell it in the U.K. for £2.25 per day, compared to 5 pence a day a generic competitor, amiodarone.

Back to the drawing board; enter the lawyers.


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