The US Food and Drug Administration issued an "approvable letter" for Acomplia in February, a step toward its approval for weight control.

The EMEA committee, whose recommendations are usually followed by European Union regulators within three months, recommended approval of the drug -- also known by its chemical name, rimonabant -- for some overweight or obese patients.

But Sanofi failed to win the agency's approval to make Acomplia available as an anti-smoking drug. The EU committee "has not adopted a positive opinion for Acomplia in smoking cessation," the company's statement said, without giving further details.

The FDA also declined to recommend Acomplia's approval as an anti-cigarette addiction treatment in February, and said it needed further information before approving it as a weight-loss tool.

Cosmetic Use Not Recommended

Merrill Lynch raised its 2010 EU revenue forecast for the drug by 50 percent to €750 million (US$940 million) on the news. "We view this as an important validation of the product," the investment bank said in a research report.

The drug has generated unusual excitement because it attacks obesity and possibly other addictive behavior in a novel way -- by blocking a pleasure center in the brain. People on the drug eat less.

In clinical trials, Acomplia trimmed nearly 16 pounds (7.3 kilograms) on average from people taking the optimal dose for two years, compared with 5.5 pounds (2.5 kilograms) for those who took dummy pills.

But the European agency recommended approval only for obese or overweight patients who also suffer from related problems, like abnormal cholesterol levels or type 2 diabetes, also known as adult-onset diabetes.

"We should only use this drug in such patients where there is a real medical need, and not in people who may seek to use it for cosmetic reasons," said Doctor Luc Van Gaal, Professor of Diabetology at Antwerp University Hospital, Belgium, in the Sanofi statement.

FDA Approval Uncertain

Sanofi says the trials also showed benefit in reducing heart disease risk-factors. The company is conducting further studies aimed at extending its use to other kinds of patients and conditions.

The recommended EU labeling already notes the drug's positive effects on cholesterol and blood glucose levels, which improves the drug's chances of winning separate approval for subsidized prescription under from public health authorities in European states.

"This is likely to help with marketing and importantly reimbursement for the drug," the Merrill Lynch research said.

But the positive EU recommendation does not mean that approval for the lucrative US market by the Food and Drug Administration will be automatic, the report cautioned.

"While this increases our confidence of FDA approval, we caution that each agency makes its own decisions and the FDA could still take a different view," it said.