Shares in GlaxoSmithKline, Europe's largest drug company, fell almost 4 per cent yesterday after the US Food & Drug Administration agency (FDA) announced plans to restrict the use of its best-selling asthma treatment, Advair.
The FDA published its proposals - which will aim to prevent doctors from recommending Advair as a first-line of treatment for asthma patients - on Friday evening in the US, after the London market had closed.
Analysts said that it could reduce revenues for the drug by as much as a quarter over the next five years. However, others remained more confident, forecasting that many doctors would ignore the advice, and continue recommending Advair - as well as its European equivalent, Seretide - to patients who they believed would be best treated by the drug.
The FDA's recommendation followed recent clinical trials which showed Advair had occasionally triggered sudden asthma attacks in its patients, some of which were fatal.
Glaxo opposed the move, however, saying Advair had been a success for millions of patients worldwide, and adding that a recommendation to allow it to be used only as a second line of treatment could lead to the deaths of those who would be best suited to it immediately.
Shares in Glaxo fell almost 5 per cent in early trading yesterday, the stock's biggest fall for more than three years, wiping some £4bn off the company's market value. But the share price recovered slightly in the afternoon, to close down 3.9 per cent at 1,439p.
Worldwide sales of Advair totalled £3.43bn last year, making it the group's biggest selling drug. It is being relied upon as one of the company's major drivers for growth over the coming years, before a number of launches which are still in the pipeline.
Glaxo now has a month to respond to the FDA decision before the final text for the product's labels are agreed. Glaxo said it intends to appeal against Friday's decision.
An increase in controls on Advair is not a complete surprise to the company. A year ago, the FDA whistleblower David Graham told a US Senate finance committee meeting that the drug needed additional warnings.