(Adds details, analyst comment, updates share price)
By Ransdell Pierson
NEW YORK, July 24 Wyeth said on Tuesday U.S.
regulators would not approve its drug Pristiq for hot flashes
until the company completes a lengthy new trial to resolve
concerns about potential heart and liver risks, sending Wyeth
shares down more than 9 percent.
Wyeth WYE.N said the U.S. Food and Drug Administration
has requested a new safety trial for one of its most important
experimental medicines, that could take a year or longer to
Analysts said the safety concerns could doom the drug --
which is also awaiting approval as a treatment for depression
-- and its potential to ensure earnings growth when Wyeth's
Effexor antidepressant and Protonix ulcer drug face generic
competition in coming years.
Credit Suisse analyst Catherine Arnold said she is no
longer counting on any sales from Pristiq, given the FDA's
"The effect is negative in the longer term and we see a
$2.6 billion revenue shortfall and a 31 cent (per share) hit"
to Wyeth's 2011 results, Arnold said in a research note.
The FDA's concerns stem from elevated liver enzymes seen in
a few women taking Pristiq in trials studying it to fight hot
flashes, and cardiovascular events seen in one hot-flashes
study, Wyeth said.
The company has been counting on Pristiq, a derivative of
Wyeth's $3.5-billion-a-year Effexor, to ease the sting when
Effexor's U.S. patent lapses in 2010 and cheaper generics hit
Revenue from Pristiq, which analysts have said could top $2
billion a year, would also help prevent a sharp earnings
decline in 2011, when Protonix loses patent protection.
Wyeth said FDA safety concerns on Pristiq's use for hot
flashes are unlikely to hurt the drug's pending separate U.S.
application as a treatment for depression, which Wall Street
considers its biggest potential indication.
But Linda Bannister, an analyst with Edward Jones, said the
FDA concerns create serious doubts about the drug's overall
future, including its approvability as a depression medicine.
"It leads me to be definitely more cautious on the
depression indication because the FDA is very focused on
safety, and anything like this will raise red safety flags,
regardless of the indication," Bannister said.
Moreover, she said publicity over the perceived heart and
liver risks could deter doctors from prescribing the medicine,
even if it were approved for one or both indications.
"It's a big setback for Wyeth," said Bannister, who noted
Pristiq was unlikely to be approved until 2009 or 2010 -- too
late to sufficiently ramp up its sales before Effexor's patent
Other industry analysts, including Deutsche Bank analyst
Barbara Ryan, had previously questioned Pristiq's medical
value, especially in light of nausea seen in a high percentage
of patients taking it in clinical trials.
Gary Stiles, chief medical officer of Wyeth, told reporters
on a conference call that the FDA requested the new hot-flashes
trial due to elevated liver enzymes seen in three women among
2,000 tested in Wyeth-sponsored trials of the drug for the
common symptom of menopause.
"(Elevated) liver enzymes are not an uncommon phenomenon"
in drug trials, Stiles said. He said higher levels of the
enzymes -- which are considered to be a marker of potential
damage to the liver -- returned to normal levels when patients
stopped taking Pristiq.
Moreover, Stiles said the FDA was also concerned about some
cardiovascular events seen in one of four studies.
"We have looked at the events, and concluded we do not
believe they were in any way caused by this," he said,
referring to Pristiq.
He said eight times more women in the trial were taking
Pristiq than placebos, to which the drug was compared.
Shares of Wyeth fell $5.04 to $50.96 in afternoon trading
on the New York Stock Exchange.