Drugs giants face $4bn fines

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Drug giants Sanofi-Aventis and Bristol-Myers Squibb face fines of up to $4bn (£2.1bn) if they are found guilty of criminal conduct by the US Department of Justice.

The DoJ opened an investigation last week into a deal struck in March by Sanofi and BMS with Apotex, a smaller rival. Under this, the two giants agreed to pay at least $40m to settle a patent dispute and keep Apotex's generic version of Plavix, a blockbuster treatment co-marketed by Sanofi and BMS, off the market until 2011.

The US Attorneys General rejected the deal late last week.

The DoJ's move is unusual. Gbola Amusa, an analyst with broker Sanford C Bernstein, said in a research note that if the drug giants are found guilty of criminal wrongdoing they could be liable under American law for up to twice the $2bn estimated annual US profit generated by Plavix, a blood thinner.

For Sanofi, the DoJ inquiry tops a list of issues that it will need to address when it reports second-quarter earnings on Wednesday. The US Food and Drug Administration's approval of Acomplia, a new anti-obesity drug for which Sanofi holds blockbuster hopes, is crucial. European regulators approved the drug last month for a range of indications including Type 2 diabetes and dyslipidemia.

But analysts now expect the FDA to take a more conservative approach, which could substantially dent the massive sales expected of the drug. Katherine Genis of broker ING Wholesale, who predicts that the US will account for $2.6bn of Acomplia's $3.3bn projected sales by 2012, said the US regulator's decision "is extremely important in the long run".