(Recasts, adds analyst comment and details)
By Edwina Gibbs
TOKYO Oct 29 (Reuters) - Takeda Pharmaceutical Co Ltd (4502.T) said on Monday that U.S. health authorities had recommended that it stop some clinical trials of its cholesterol-lowering TAK-475, a key drug candidate for the company.
TAK-475 is one of three drugs in late-stage development that Japan's biggest drugmaker had hoped would become a big earner to offset expected profit declines after its mainstay diabetes drug Actos loses U.S. patent protection in 2011.
The U.S. Food and Drug Administration recommended that Takeda halt trials with higher doses of the drug after elevated levels of an enzyme that may indicate liver damage were more often found than in control groups. This included severe cases of the complication.
It has also requested additional clinical data before the company submits a new drug application.
"In a best case scenario, this is going to tack on another two years before Takeda can submit the drug for approval," said Kenji Masuzoe, drugs analyst at Deutsche Securities.
"But this involves a liver enzyme that Takeda had not reported problems with before, which raises red flags and puts a huge question mark over the drug itself," he added.
He said Takeda's shares, which ended trade at 8,060 yen prior to the announcement, could fall by 400-500 points on Tuesday.
Takeda had planned to submit its new drug application for TAK-475 in the April-June quarter next year.
TAK-475 is a "squalene synthase inhibitor", a type of cholesterol-lowering drug that has not yet been brought to market. Analysts believe that Takeda is the only drugmaker currently working on the development of such a drug.
Takeda said in a statement it would immediately study future plans for TAK-475 in the United States, Europe and Japan.
It also said the greater frequency of patients found with elevated liver enzyme levels had so far not been observed with lower doses of the drug.
If it were to reach the market, TAK-475 would be up against Merck & Co. Inc's (MRK.N) and Schering-Plough Corp's SGP.N Zetia and Vytorin.
Sales of Zetia and Vytorin, which combines Zetia and Merck's slightly less potent statin Zocor, rose 26 percent to $1.3 billion in the latest quarter.
Takeda's two other key drug candidates, both also in phase III development, are SYR-322, which belongs to a new class of diabetes treatments, and TAK-390MR, a successor to heartburn and ulcer drug Prevacid.
Takeda has said it hopes to file new drug applications in the United States for these two by mid-2008.