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Takeda shares bottom out as FDA suspends TAK-475

Shares in Japanese pharmaceutical company Takeda dropped 12 per cent on 30 October 2007 after the FDA recommended that phase III clinical trials of cholesterol-lower drug TAK-475 be suspended over serious side-effects.

Shares in Japanese pharmaceutical company Takeda dropped 12 per cent on 30 October 2007 after the FDA recommended that phase III clinical trials of cholesterol-lower drug TAK-475 be suspended over serious side-effects.

The FDA was concerned over levels of the enzyme transaminase in some patients on daily doses of 100mg of TAK-475. There was a tendency for elevated levels, which included severe complications among patients taking the higher dose compared with those not on the dosage level, according to Takeda.

The ruling requires Takeda to provide additional clinical data on TAK-475 and recommends suspension of clinical studies with high doses because of possible liver damage. The company had originally set out a submission for a regulatory review timeframe by Q1 FY08.

Takeda's shares dropped to a 15-month low of JPY 7,060 (USD 62) on the Tokyo Stock Exchange, while the Nikkei 225 index fell 0.3 per cent on the news.

Takeda had been banking on TAK-475 reaching blockbuster status, racking up more than JPY 100bn (USD 871.8m) in sales annually. Lipid-lowering drugs are the world's top-selling therapy. For example, Pfizer's Lipitor (atorvastatin) is the world's best-selling medicine, racking up USD 12.9bn in FY06.

Takeda, although the largest pharmaceutical company in Japan in terms of revenue, is only a medium-sized entity in comparison with giants, such as Pfizer and GlaxoSmithKline (GSK). As a result, the delay to TAK-475 will impact heavily on the company's earnings, as little else in the pipeline could have brought in as much money.

According to UBS Securities Japan analysts it was possible that TAK-475 would never reach the market in its present dose. They also changed their rating from "Buy" to "Neutral" and even withdrew 2011 sales projections for the drug, which were approximately USD 2bn.

Takeda has not released a product on the US market since it marketed its insomnia pill Rozerem (ramelteon) in September 2005, said Bloomberg. Analysts polled say that the company's sales will slump once its flagship diabetes treatment Actos (pioglitazone) begins to experience generic competition in 2011. The drug accounted for 29 per cent of total revenue in Q1 FY07.

SMBC Friend Securities analysts say, however, that Takeda could get TAK-475 on the market at a lower dose in combination with other cholesterol medicines.

30th September 2008

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