(Recasts, adds analyst comment, updates shares prices)
By Lewis Krauskopf
NEW YORK Aug 10 U.S. health officials have
determined that a schizophrenia drug developed by Wyeth WYE.N
and two other drugmakers is not approvable, the companies said
on Friday, dealing Wyeth a second setback in a month on a
product potentially close to the market.
And in another blow to Wyeth, its partner on an
experimental hepatitis C drug, ViroPharma Inc. VPHM.O, said
on Friday that the companies were stopping a clinical trial of
the medicine due to safety concerns.
Wyeth shares fell as much as 7.7 percent to their lowest
point in more than a year.
Shares of Belgium's Solvay SA (SOLB.BR) and H.Lundbeck A/S
(LUN.CO) of Denmark, which developed the schizophrenia drug
bifeprunox with Wyeth, were off 5 percent and 3.2 percent,
respectively. ViroPharma shares were off 20 percent.
Wyeth's problems heightened investor doubts about the
company's ability to grow profits. Last month the company said
U.S. regulators would not approve its Pristiq drug for hot
flashes until it completes a lengthy new trial.
The Madison, New Jersey-based drugmaker faces generic
competition to its Effexor antidepressant and Protonix ulcer
drug in the next few years, and investors had hoped drugs like
Pristiq and bifeprunox would help replace those blockbuster
"This is now three negative events we've seen with Wyeth,"
said Michael Castor, a portfolio manager with health care fund
Sio Capital Management.
"With Wyeth facing the loss of significant (Effexor and
Protonix) revenues now in the three-to-four-year time frame,
and the new products that were going to replace those revenues
either disappearing completely or being pushed out, it casts a
big overhang on the company," Castor said.
Deutsche Bank analyst Barbara Ryan said, "Now everybody is
focused on the (revenue and earnings) cliff in 2010 and 2011,
and increasingly it looks like they don't have sufficient
firepower to offset that."
Wyeth said the U.S. Food and Drug Administration concluded
that effectiveness data for bifeprunox were not sufficient for
approval when compared with other drugs.
The agency requested further information on the human
metabolism of bifeprunox and the case of a patient who died
while participating in one of the clinical trials of the drug,
according to the company.
Natixis Bleichroeder analyst Jon LeCroy said he had
forecast bifeprunox sales of $1 billion in the United States in
2011, but now assumes the product will not reach the market.
Studies have found bifeprunox to be less effective than
other schizophrenia drugs but with fewer side effects,
according to Wyeth and its partners. Older schizophrenia drugs
have been linked to problems such as weight gain and elevated
Wyeth said the FDA action suggested the company could still
gain approval for bifeprunox for the long-term maintenance of
patients with schizophrenia. Company officials plan to meet
with the FDA to determine how other studies might support
On a conference call with analysts, Wyeth officials said
the product's approval would be delayed for one to two years
while the company gathered clinical data to satisfy
The officials said the patient death occurred during a
trial examining bifeprunox for acute treatment of
schizophrenia. They said it was a complex case and the patient
was on bifeprunox.
However, asked by an analyst about the issues the company
needs to resolve about the drug, Wyeth officials said they were
not safety issues.
LeCroy, of Natixis Bleichroeder, said even if the drug won
approval for maintenance of schizophrenia, as opposed to acute
treatment of the mental illness, such a market appeared
"You're really looking at a case where you'd have to switch
from an existing agent on someone who is already under control
to this product, and physicians typically won't switch drugs
when they're working," LeCroy said. "So I don't know who this
would be appropriate for."
Bifeprunox is part of a family of drugs called atypical
antipsychotics. It would compete with Johnson & Johnson's
(JNJ.N) schizophrenia drug Risperdal, Eli Lilly and Co.'s
(LLY.N) Zyprexa and other medicines.
In the case of the hepatitis C drug, HCV-796, ViroPharma
said some patients developed elevated liver enzymes, a warning
signal for liver damage. Wyeth and ViroPharma said they would
analyze the data before deciding whether to continue
development of the drug, but some analysts believe it is dead.
Wyeth shares were down $3.09, or 6 percent, to $46.49 in
afternoon trade on the New York Stock Exchange after falling as
low as $45.76 earlier in the session. They are off more than 16
percent since before the announcement of the Pristiq setback.
(Reporting by Lewis Krauskopf; additional reporting by Lisa
Richwine in Washington and Toni Clarke in Boston)