Market Report: AstraZeneca moves back as Brilinta fears increase

AstraZeneca was one of the top-tier index's numerous fallers yesterday, as analysts turned bearish on the likelihood of a key drug gaining approval in the United States.

The pharmaceutical company is currently waiting to hear whether the Food and Drug Administration (FDA) will let it launch Brilinta – its new heart drug – in the US, after it was told in December that more information was required on the blood-thinning product.

Earlier this month, the FDA gave a new deadline of 20 July for its decision, and although AstraZeneca has remained positive, Evolution Securities has become rather more pessimistic.

Following a re-examination of the data, the broker's analysts said that they "think it is more likely than not that the FDA will take the view that the efficacy of the drug has not been proven in US patients, and that AstraZeneca should conduct a new trial in US patients".

Calling Brilinta the company's "most important new product opportunity", they added that they now rate its "chances of approval in the US in 2011 [as] lower than 50 per cent, therefore we remove our previous US product sales from our model". As a result, they reiterated their "sell" recommendation while cutting their target price for the group – which retreated 7p to 3,026.5p – to 2,650p from 2,850p.

Overall, the FTSE 100 shed 68.19 points to close at 6,014.8 as the situation in Libya left investors searching for safe havens. One of the beneficiaries was gold, and its strong price helped up many of the yellow metal miners.

Centamin Egypt topped the second line by putting on 7.1p to 129.3p as it enjoyed a rebound after a 12 per cent fall on Friday following protests at its Sukari mine in Egypt. The group responded by saying that operations had remained unaffected, and the market seemed at least partly placated.

Also boosted by the strength of gold was Randgold Resources, which was bumped up 200p to 5,235p, while the silver miner Fresnillo was 43p better off at 1,550p.

Invensys was another of the 12 blue-chip companies that managed to avoid a retreat, as bid talk appeared once again around the engineering group. The latest tale doing the rounds was that it is being looked at by a number of global peers, and it rose 12.8p to 357.8p thanks to speculation that a bidding war could be imminent.

In initial trading, hopes of an approach were also helping Lonmin forwards, following reports over the weekend that said the chief executive of Xstrata – 19p lower at 1,411p – is still keen on making another attempt to buy the platinum company. Yet it failed to maintain its momentum, sliding 12p to 1,841p.

Many of the banks found themselves towards the foot of the index , with Lloyds Banking Group taking the wooden spoon. It fell 2.75p to 66.55p after agreeing with the Financial Services Authority to make goodwill payments to about 300,000 Halifax customers totalling £500m over a mortgage blunder. Meanwhile, Royal Bank of Scotland was down 1.89p at 46.64p ahead of its full-year results on Thursday.

worries that it could face a step-up in competition, plus decreasing hopes of a takeover approach, meant Ocado slipped back 20.1p to 239.2p. The loss of nearly 8 per cent came as the market had its first chance to react to the sale – announced late on Friday – of £5m-worth of shares by its chief executive, Tim Steiner.

Shore Capital's Clive Black said the disposal shows that "no takeover negotiations are under way" and reiterated his "sell" advice on the online grocer, highlighting the recent news that Waitrose is investing £10m in its online business as a worry.

Cheryl Cole does not often appear in brokers' research notes, but yesterday analysts managed to find an excuse to write about the pop star in the wake of speculation that the next series of The X Factor may include neither her nor Simon Cowell.

ITV shifted down 1.9p to 84.45p as traders highlighted the importance of the talent show to the network, but Panmure Gordon's Alex DeGroote said it was nothing more than "a possible minor risk factor". Meanwhile, UBS said that if the two stars were missing, "the advertising loss would not be significant as ITV can bring in other celebrity names".

Elsewhere, updates were proving cheerful for a number of companies, including Hammerson, whose final results drove the property group 7.7p forwards to 455.2p. Meanwhile, the sausage skin manufacturer Devro jumped 11.7p to 243.7p as its adjusted pre-tax profit rose 44 per cent, while Lancashire – up 6p to 616p – and Mondi – up 11.5p to 546.5p – also impressed.

among the small-cap companies, ProStrakan closed 22.62p better off at 131.5p – a surge of more than 20 per cent – after the biotech company agreed to a £292m offer from the Japanese group Kyowa Hakko Kirin.

Also doing well was XP Power, closing 176p ahead at 1,710p following its preliminary results, but Helphire was 3.12p lower at 14.25p as it said its first-half profit had dropped by more than a third.