Takeda Shares Slump Most Since 1987 On U.s. Diabetes Drug Delay
Asias biggest drugmaker dropped 500 yen, or 13 percent, to 3,320 yen on the Tokyo Stock Exchange, the biggest fall since Oct. 20, 1987, and the second-biggest decliner today among shares that comprise the Nikkei 225 Stock Average.
Takeda announced after markets closed on March 6 that the U.S. Food and Drug Administration said its clinical data on alogliptin were “insufficient” because of changes to diabetes guidelines released by the U.S. in December. The second such delay for alogliptin means it probably wont hit the market until after Actos loses patent protection in January 2011, Philip Hall, an analyst in Tokyo at KBC Securities, said.
“The Actos expiration will become extremely painful with no offsetting revenue likely to be available at the time,” Hall wrote in a note to clients dated March 6. He cut his rating on the stock to “sell” from “hold” and reduced his forecast for Takedas operating profit in the year ending March 2011 by 14 percent to 344 billion yen ($3.4 billion). Hall expects the drug to be approved in the second half of 2011.
Nomura, Credit Suisse Cuts
Ratings on Takeda were cut to “neutral” from “buy” by Ryoichi Urushihara, a health-care analyst at Nomura Holdings Inc. in Tokyo, and to “neutral” from “outperform” by Fumiyoshi Sakai at Credit Suisse Group AG.
Takeda will discuss with the FDA whether additional tests are required for cardiovascular risks, while the FDA maintained its June 26 deadline for assessing the drugs approval application, company spokeswoman Ayako Iwamuro said.
Cardiovascular disease is the leading cause of death among U.S. diabetics, who number about 24 million. Proposed treatments for Type 2 diabetes should follow new testing standards to rule out an “unacceptable increase” in heart problems, according to new guidance by the FDA after U.S. lawmakers demanded a review of testing when GlaxoSmithKline Plcs Avandia was linked to heart attacks.
The recommendations apply to all experimental diabetes drugs, even if studies are in progress or the medicine has been submitted for approval.
Sleeping Pill
Takeda, which hasnt released a new product in the U.S. since the sleeping pill Rozerem in September 2005, applied to the FDA to sell alogliptin, or SYR-322, as a once-daily treatment in December 2007. The FDA postponed its decision on the drug in October because it wasnt able to complete its evaluation of the data, citing “internal resource constraints.”
Takeda President Yasuchika Hasegawa is counting on alogliptin to prevent a potential sales decline when Actos, which generates 298 billion yen, or a quarter of Takedas annual revenue, loses patent protection in less than two years.
The delay of approval means alogliptin will have a shorter patent life and a “weaker positioning” against competitors, said Hiroshisa Shimura, an equities analyst at UBS AG in Tokyo, in a note dated today. He expects the drug to generate $1.4 billion in 2012.