AstraZeneca’s market value shrunk by £3 billion after the US regulators stalled its new heart treatment medicine – ‘Brilinta’.
The share price of AZ has been rising for the last few months on the hope that one of its most promising new drugs will get the FDA nod. However, the share lost the previous months gains and lost 212p on the news.
The news is bad since a number of its drugs will come off patent and the company requires new replacements soon. Analysts estimate that the US market alone can account for 70 percent of Brilinta sales and the delay will lower the Earning Per Share (EPS) by 4 percent in 2012 alone.
The AZ setback coincides with the FDA ruling that had barred Roche on Thursday from selling its anti-cancer drug Avastin for some types of breast-cancer treatment.
AZ has already conducted clinical trial on 19,000 patients in 43 countries, which has failed to convince the FDA and it has asked for further details. The latest decision comes after a delay of 3 months and has virtually asked AZ to start a new trial. In September, AZ had commissioned a new trial to study the long term effects of Brilinta.
Brilinta is a blood thinning agent that prevents blood clotting in heart patients. Investors had high hopes of the drug – which was dashed on Thursday. It may be months before new study results come in.
AZ was hopeful that Brilinta will rival the world’s second best drug Plavix – made by Bristol-Meyers-Squibb and Sanofi-Aventis, which raked in £6 billion of sales. Analysts had pegged Brilinta sales to £1.25 billion.
The company recently took Baroness Shiriti Vadera – an Investment Banker and Gordon Brown’s close confidante, on board as a non-executive director. Vadera is reported to have been offered a £95,000 per year contract by AZ.