March 17 (Bloomberg) -- Sanofi-Aventis SA’s Multaq is the only drug shown in clinical trials to reduce hospitalizations and deaths in people with erratic heartbeats. The company now must persuade U.S. regulators who rejected the drug once before that Multaq is safe.

That may be a challenge because drugs that force the heart into a normal rhythm don’t always lower the risk, and sometimes increase it, studies show.

The Paris-based drugmaker, seeking its first new $1 billion-a-year medicine in almost a decade, got a vote of confidence from U.S. Food and Drug Administration staff members, who said yesterday that Multaq should be approved along with some limits on its use. Sanofi may be rewarded for continuing to develop the drug after the FDA rejected it in 2006. Citigroup Inc. analysts estimate peak sales of about $1.88 billion a year if Multaq wins approval.

“A positive outcome would at least give investors a little more confidence that the innovation in Sanofi’s pipeline can be delivered to the marketplace,” said Michael Leacock, an analyst at ABN Amro in London, in a telephone interview.

Multaq is Sanofi’s most important drug in development and may help the company replace sales lost when its two biggest sellers, the blood thinners Lovenox and Plavix, face more competition. If the drug clears the FDA review, a “critical event” for the company, it may become a bestseller, Chief Executive Officer Chris Viehbacher said in an interview.

Shares Gain

Sanofi had its biggest gain in almost five weeks yesterday after the FDA staff review came out. Before yesterday, Sanofi had fallen 12 percent this year, compared with a 14 percent decline in the 18-member Bloomberg Europe Pharmaceuticals Index. The drugmaker fell 4 euro cents to 41.76 euros today in Paris trading.

A Sanofi-funded study, published last month in the New England Journal of Medicine, showed Multaq reduced deaths from erratic heart rates and cut hospitalizations. The company’s first pivotal trial was halted in 2003 after patients with severe heart failure were more likely to die after taking it. That complicates efforts to handicap the drug’s fate at the FDA, said Ira Loss, an analyst at Washington Analysis.

“This whole area is a minefield,” said Loss, who has tracked the FDA for more than 30 years, in a telephone interview. “There is a significant need for new therapeutic options in treating this condition. But it’s a very dangerous game to make predictions about what might occur.”

Meeting Tomorrow

An FDA advisory panel is meeting tomorrow to review the drug, and the agency is slated to deliver a verdict by the end of April. Citigroup analysts said the pill may be shown to be safer than generic drugs like amiodarone, which has toxic side effects. The analysts advised their clients earlier this month to adopt an investing strategy that would pay off if shares rally following the FDA advisory committee hearing.

“We see short-term upside based on the favorable profile of Multaq,” Stuart MacDonnell, a London-based Citigroup analyst, wrote in a March 4 note to clients. He said recent trials provide a “good basis” for U.S. approval of the drug, which could bring in sales of 1.5 billion euros ($1.88 billion).

FDA staff members yesterday said Multaq should be approved, with restrictions on which patients receive the drug and what claims the company can make about its benefits for the 2.5 million Americans with an electrical malfunction of the heart called atrial fibrillation. The condition affects almost 4 percent of people aged 60 and older, and can foreshadow sudden death. Sanofi shouldn’t be able to claim Multaq reduced death rates, since the evidence wasn’t clear and the company altered and expanded its key clinical study to get the result, the FDA reviewers said.

Critical Decision

Approval for Multaq would take pressure off Viehbacher. He joined the company in December from GlaxoSmithKline Plc, pledging to revitalize research and development. Acomplia, an experimental drug for obesity that was once considered its most promising new medicine, was rejected by the FDA in 2007 after several setbacks and pulled from the European market last year.

The Multaq decision is a critical one for Sanofi and a reflection of all the past processes, he said. If the drug clears the advisory committee hearing and wins approval, it will be a significant product for the company, he said.

“There is clearly unmet medical need, and there clearly is a benefit,” Viehbacher said. “We need to explain this and make sure the advisory committee is comfortable.”

Even a positive review by the FDA advisory panel may not guarantee success. The agency’s outside advisers recommended approval of Astellas Pharma Inc. and Cardiome Pharma Corp.’s vernakalant in December 2007, saying it was an effective alternative to older drugs or devices that shock the heart into a normal rhythm. It would have been the first new intravenous treatment for the atrial fibrillation in more than a decade.

The panel urged restrictions against using the drug in high-risk patients because one person died after getting it during the development process and several developed side effects. Eight months later, the FDA declined to approve the drug, saying more information was needed to ensure its safety.

To contact the reporter on this story: Michelle Fay Cortez in London at mcortez@bloomberg.net

Last Updated: March 17, 2009 12:51 EDT