Healthcare company Sanofi Aventis France said it had been placed under formal investigation on charges of manslaughter over Depakine, which is an epilepsy drug that caused birth malfunctions and slow neurological development when taken during pregnancy.
Sanofi Aventis France denied the charges and is challenging the merits of the investigation, it said in a written statement to Reuters.
"All these elements do not in any way prejudge the responsibility of the company," Sanofi Aventis France said.
The company said it had respected all its obligations regarding information provided on Depakine.
In France, being put under formal investigation means that a dedicated investigative judge considers the case is serious enough to warrant an investigation.
Such legal cases can take years and do not necessarily result in significant amounts of compensation in France compared to other jurisdictions such as the United States.
Sanofi has repeatedly said it has no intention to compensate or take part in a state-backed compensation mechanism for Depakine.
Marine Martin, president of victims association APESAC, said on Twitter the new formal investigation was a "a great victory" for the families she represents.
France's social affairs inspection agency IGAS has estimated that between 2006 and 2014, 425 to 450 babies suffered congenital birth defects or were stillborn following exposure to Depakine.
Depakine, which lost its patent in 1998, is prescribed in more than 100 countries.
News about the formal investigation was first reported by French newspaper Le Monde.
(Reporting by Sudip Kar-Gupta and Henri-Pierre André; Writing by Mathieu Rosemain; Editing by Jason Neely and Jane Merriman)
