London: Sanofi-Aventis, world’s leading insulin and anti-diabetes drug manufacturer, received a major setback when European authorities ordered the withdrawal of an anti-obesity drug from the market saying it had side-effects on mental health.

The drug, Acomplia, has already been banned in the United States, for causing depression and suicidal tendencies.

According to the European Medicines Agency, Acomplia doubled the risk of mental disorders in obese or overweight persons. The agency directed medical practitioners not to prescribe the drug to their patients.

Sanofi has agreed to comply with the Agency’s directive and will withdraw the drug from the market. Though the drug was considered a prestige medicine for the company, its withdrawal from the market would have minimal impact on its profits, according to informed sources.

Sanofi said it would suffer a loss of 50 million euros ($64.25 million) in the fourth quarter to write off the stocks of the medicine. The company claimed the move would not affect its financials for 2008.

Acomplia, promoted as a wonder drug, had sold 81 million euros in the first nine months of 2008, which is not a significant amount considering the overall turnover of the French pharmaceuticals major.

The company claimed that Acomplia has beneficial effect on obese and overweight patients suffering from type 2 diabetes. It said it will continue Phase III trials of the drug as there was no ban on the trials.

The news of the ban on the drug wiped out the 5 per cent gain in the price of Sanofi’s stock withnessed recently. The stock was being quoted at 45.7 euros.