US blow for AstraZeneca

Shares in AstraZeneca tumbled today after a key drug it has developed in the fight against strokes was provisionally rejected by US regulators.

Shares in AstraZeneca tumbled today after a key drug it has developed in the fight against strokes was provisionally rejected by US regulators.

AstraZeneca was told it needed to provide more data on Exanta amid fears that the blood-thinning drug could cause liver failure in patients over the long term.

The views of the advisory committee to the US Food and Drug Administration (FDA) were also based on concerns that patients were more likely to suffer heart attacks when the product is used after knee surgery.

The news sparked a string of downgrades by City brokers who had previously estimated that Exanta had an 80-per-cent probability of recommendation. Shares fell 155p to 2295p.

AstraZeneca hoped the drug would challenge the dominance of warfarin in the market for blood-thinning treatments - worth 4 billion US dollars (£2.18 billion) a year.

Demand for drugs that can help to prevent blood clotting and strokes is rising by 13% a year as the populations of Western nations become more elderly.

AstraZeneca pledged to seek further dialogue with the FDA on a way forward for Exanta, which has been used in clinical trials by more than 30,000 patients in over 25 countries.

It expects a final decision by the FDA on whether to approve the drug to be announced on October 23 at the earliest.

Chief executive Sir Tom McKillop said: "We are disappointed with the outcome of the advisory committee, particularly for patients who need an effective alternative therapy to warfarin."

But a company spokesman said the concerns would not slow the rollout of the drug in Europe after it won approval from EU regulators earlier this year.

The drug is already available for prescription by doctors in Germany, although it has not yet gone on sale in the UK due to a dispute over how the product is labelled.

Steven Plag, an analyst at Credit Suisse First Boston, rated the chances of FDA approval for Exanta at just 10% following the "uncompromisingly harsh review".

He said: "We suspect that the requirement of an approvable letter would be onerous and that any eventual commercialisation would be delayed by two years."

The stock was downgraded and Mr Plag said AstraZeneca was now under pressure to impress investors with its remaining pipeline of new drugs at a business review day next month.

Morgan Stanley analyst Andrew Baum said the FDA decision was a "tough blow" for AstraZeneca and the way forward for Exanta was confusing, although the company was unlikely to appeal.

If the drug won more approvals in Europe then this could provide positive safety data that could persuade US regulators into changing their stance, he said.

Mr Baum said: "The non-recommendations come as a major surprise for us, given both the recent EU approval and our extensive research on the agent."