UPDATE 2-Takeda shares plunge on drug delay worries
* Shares hit by news FDA wants more data on key diabetes drug
* Stock falls 13 percent on drug delay fears
* Analysts say drug launch could be delayed by 2 years
By Yumiko Nishitani
TOKYO, March 9 (Reuters) - Shares of Takeda Pharmaceutical (4502.T), Japan's biggest drugmaker, dived 13 percent on Monday, plunging by the daily limit on fears the replacement for its best-selling diabetes drug could be delayed by years in the United States.
Shares of Takeda logged the biggest percentage drop since Black Monday of October 1987 to close at 3,320 yen after news that the U.S. Food and Drug Administration wants more data to review of its key diabetes drug candidate alogliptin, or SYR-322.
Takeda shares tumbled to their lowest close since October 1998 in a much steeper fall than the overall market, in which the Nikkei average hit a 26-year closing low and the broader Topix index saw its worst close in 25 years. [.T]
The drug under review by the FDA is critical to Takeda's business as it is expected to be the successor to its best-seller Actos, which accounts for roughly a quarter of its revenues and will lose U.S. patent protection in 2011.
"There is now an increased likelihood that SYR-322 will not be ready in time to fulfil its main function of acting as a successor once U.S. patents for Actos expire in 2011," said Credit Suisse analyst Fumiyoshi Sakai, adding that approval could take at least two more years.
Takeda also aims for SYR-322 to offset the loss of earnings after ulcer drug Prevacid, its second-biggest seller, loses U.S. patent protection this year.
The U.S. Food and Drug Administration has told Takeda the amount of data it submitted at the time of its application for SYR-322 in December 2007 did not meet new requirements that were introduced at the end of last year, Takeda said on Friday. [ID:nT184869]
The news follows Takeda's announcement two weeks ago that it had given up on the development of a drug candidate for severe sepsis, which was in the final Phase III stage. [ID:nTFA004298]
Sales of Actos in North America accounted for 319 billion yen ($3.24 billion) or 23 percent of Takeda's overall revenues in the year to March 2008.
Takeda, which like other global drugmakers is suffering from rising costs for developing drugs, declined to say if it would conduct further testing to supply the requested data.
Credit Suisse's Sakai, however, said more clinical trials are needed to assess cardiovascular risk, the data the FDA seeks, which would mean at least two more years for the drug to be approved.
He forecasts Takeda's revenues and operating profit will drop by 12 and 33 percent, respectively, in the year to March 2012, because of a likely two-thirds drop in U.S. sales of Actos to $1 billion and due to the absence of SYR-322 on the market.
Takeda, which bought Millennium Pharmaceuticals for $9 billion last year, was expected to slow down on acquisitions, but it may now have to do more of them to compensate for a possible delay in the drug's launch.
"Looking ahead, we foresee an emerging need for Takeda to utilise its ample funds to make additional drug acquisitions," Nikko Citi analyst Hidemaru Yamaguchi said in a note to clients.
Yamaguchi also expects the launch of SYR-322 to be delayed by two years to 2011.
Takeda had 222.6 billion yen of cash and deposits at the year-end.
To improve its cost efficiency in developing cancer drugs, Takeda plans to rely on Millennium, its U.S. cancer specialist subsidiary, in deciding whether to invest more or give up on a cancer drug candidate, the Nikkei business daily reported on Monday.
Takeda was not available to comment on the report. ($1=98.32 Yen) (Editing by Michael Watson)
