AstraZeneca hit as diabetes drug fails

 
City A.M. Reporter
PHARMACEUTICAL giant AstraZeneca’s shares fell as much as 1.5 per cent yesterday after US medical regulators rejected its new diabetes drug because of its potential side-effects.

Federal drug authorities said experimental diabetes medicine dapagliflozin should not be allowed on the market.

The advisory panel vote on dapagliflozin, a once-daily pill designed to eliminate blood sugar through the urine, is a blow to the company, which saw the drug as a potential cash spinner.

Regulators studying the drug, which AstraZeneca is developing jointly with New York-based Bristol-Myers Squibb, said it may cause breast and bladder cancers.

But AstraZeneca hit back at the findings.“Based on a thorough nonclinical and clinical assessment, the data do not suggest that dapagliflozin is associated with a risk for either of these cancers,” AstraZeneca said in documents presented to regulators.

Analysts predicted that dapagliflozin could reach nearly $500m (£309m) in sales, if approved. An FDA request for more research on cancer risk “could delay the drug from reaching the market for several years,” Jeffrey Holford of Jefferies said.

The drugs are critical for AstraZeneca, which could lose billions in sales over the next several years as generic drugmakers take aim at many of its top sellers including antipsychotic Seroquel.

The firm’s shares tanked 1.5 per cent after the announcement, before recovering to close 0.5 per cent up on the day.