Sanofi (SNY.US) is under investigation by the European Union for allegedly defaming a competitor's flu vaccine.

Sanofi-Aventis (SNY.US) is currently under investigation by EU regulatory authorities for allegedly defaming competitors' flu vaccines in order to increase its own profits. EU regulatory authorities expressed concerns on Friday that Sanofi conducted misleading advertising activities against CSL Seqirus' Fluad vaccine, thus boosting sales of Sanofi's own Efluelda vaccine. The EU regulatory authorities added that the alleged defamation was mainly targeted at healthcare professionals in Germany and France, including some false claims implying that "the evidence supporting the Fluad vaccine is weaker than that of Efluelda." EU Competition Commissioner Margrethe Vestager stated on Friday that the investigation "shows the Commission's determination to address defamatory practices that may cause undue harm to competition and informed consumer choice." For years, the EU has been focusing on regulating and cracking down on unfair competition practices by global pharmaceutical giants. The Commission has warned multiple times that top industry players are using various new tactics to evade fair market competition constraints, especially in the context of an increasingly concentrated market in the EU. Following a secret raid on Sanofi's offices in Germany and France in September last year, regulatory authorities initiated an investigation into the company. A Sanofi spokesperson stated that the company "believes it has fully complied with all applicable laws and regulations, including competition law," and is "fully cooperating" with regulatory authorities. The EU's investigation has added to the challenges faced by the French pharmaceutical company as it struggles to revitalize its research and development pipeline. In February this year, former CEO Paul Hudson was dismissed for failing to bring new drugs to the market quickly enough. The primary task of the new CEO, Pauline Gari, is to establish a more solid foundation for new products under Sanofi before the patent cliff of its flagship drug Dupixent and the gradual decline of revenue growth momentum. Earlier this month, Sanofi faced another setback in research and development. The company paused a clinical trial of an experimental drug, riliprubart, for a rare autoimmune disease due to lack of efficacy. Riliprubart was seen as one of Sanofi's core pipeline candidates in the rare disease field. Formal investigation does not imply that the company has engaged in any improper conduct, and the company has the opportunity to address the concerns of the EU. If the investigation ultimately finds Sanofi's behavior inappropriate, it could face substantial fines. Fines for breaching EU competition rules can go up to 10% of the company's annual global revenue, but actual fines rarely reach such high amounts. In 2024, Teva Pharmaceutical Industries Limited Sponsored ADR (TEVA.US) was fined nearly 463 million euros by EU regulators for unfairly defaming competitors' multiple sclerosis drugs. Additionally, Vifor Pharma is also undergoing a comprehensive antitrust investigation, with regulators finding that the company spread misleading information to suppress Pharmacosmos; the latter being its "sole potential competitor" in the European intravenous iron supplement market. Before the US stock market opened on Friday, at the time of writing, Sanofi's pre-market price had risen by 0.84%.