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TAK-475 low-dose clinical trials go ahead

Takeda stalls its stock decline on the announcement that it will continue with small-dose US clinical trials of TAK-475, its cholesterol-lowering drug

Takeda has stalled its stock decline on the announcement that it will continue with small-dose US clinical trials of TAK-475, its cholesterol-lowering drug.

Earlier this week, shares fell 12 per cent on the Tokyo Stock Exchange, after the FDA asked the Japanese pharmaceutical company to halt studies using higher doses and ask for additional clinical data on the drug. In high doses, TAK-475 could harm liver function.

A company spokesperson revealed that the company will continue clinical trials investigating 50 mg doses, while trials testing the higher 100 mg dose will be suspended. While trials of the lower dose would continue in the US, Takeda would also need to conduct additional studies in the future.

Merrill Lynch analysts said the announcement was significant for Japan's biggest revenue-producing pharmaceutical company because the stock drop was caused by the assumption that lower-dose trials would also be pulled. A number of broker firms cut their ratings on Takeda on the news that the FDA ruling could delay TAK-475 from reaching the market until 2011.

Peak annual sales for TAK-475 were forecast to reach approximately JPY 200bn, offsetting the expected reduced revenue coming in from Takeda's best-selling drug, the diabetes treatment Actos (pioglitazone), the patent of which expires in 2011.

As PMLive reported this week, Takeda is a medium-sized pharmaceutical company, so any loss in revenue from such an important drug would leave the company floundering. For example, FY06 sales of Actos were JPY 336bn, while total group sales were JPY 1.3tn in the same time period.

Merrill Lynch analysts revealed that they thought a lower dose would be approved by the FDA. They said that investors overreacted on the assumption that 50 mg would be suspended also, adding that the stock was now a real bargain.

Nikko Citigroup analysts were not quite so optimistic, noting that the side-effect of liver damage lowered the chances TAK-475 being approved. They added that the drug's launch could still be pushed back and peak annual sales fall to JPY 50bn. The analysts' new target price of JPY 8,000 (down on JPY 9,000) was still more than the price the stock is trading at now (circa JPY 7,120).

30th September 2008

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