UPDATE 2-Orion shares sink on news of FDA drug probe

Thu Apr 1, 2010 9:07am EDT

* FDA probes Orion Parkinson's drug for possible cancer link

* CEO says sees no sales impact from probe

* Shares sink 10.9 pct, analysts say drop is overdone

(Adds analyst quote, Novartis comment, updates shares)

By Eva Lamppu

HELSINKI, April 1 (Reuters) - Shares in drugs maker Orion (ORNBV.HE) sank on Thursday on news the U.S. Food and Drug Administration (FDA) is evaluating data that may suggest the firm's key Parkinson's drug is tied to increased prostate cancer risk.

By 1256 GMT Orion shares were 10.9 percent lower at 14.58 euros, with heavy volumes making the stock the third most-traded in Helsinki in pre-holiday trade.

The FDA said overnight it has not concluded that Stalevo increases the risk of developing prostate cancer, and advised patients not to stop treatment unless told to do so by their doctors. [ID:nN31233942]

Analysts said the share price drop looked overdone.

"The study results were already communicated a year ago, and now the FDA is looking further into it," said analyst Sami Sarkamies at Nordea Markets.

"If it was a new drug with a ten-year patent, possibly the impact would be bigger, but this is a drug living the last moments of its life cycle," he said.

The patents of Orion's key Parkinson's drugs, Stalevo and Comtan, will start to expire in 2012.

Orion Chief Executive Timo Lappalainen said he did not know when the probe would be completed.

"We have not seen this is as such a significant matter that we would need to communicate it," he said, adding he did not expect sales to be affected.

Lappalainen said Orion had delivered its database on Stalevo to the FDA "some time ago" when the firm was planning to broaden the use of the drug.

Orion makes around a third of its total revenues from Stalevo and Comtan, distributed by Swiss-based Novartis (NOVN.VX), with half of the sales coming from the U.S. Last year Novartis reported global sales of $554 million for Stalevo and Comtan.

Both firms said they were working with the FDA as it evaluates the data.

"Novartis is in discussions with health authorities to further analyze the data and determine (the) next steps," Novartis said in a statement.

Novartis shares were flat at 56.75 Swiss francs. (Reporting by Eva Lamppu; Editing by Sharon Lindores)

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