Sleep drug's safety issues torpedo Actelion shares

Shares of Switzerland's Actelion (ATLN) sank after the developer announced that its experimental sleep drug had hit its primary endpoint in a late-stage trial but raised certain unspecified safety issues that needed further analysis. And with regulators on high alert for any safety issues that could be linked to a sleep therapy, analysts wasted little time before they began to fret over the possible implications.

"For a sleeping pill, which often is taken chronically and for a non-life threatening ailment, safety hurdles are particularly high and therefore the safety profile of almorexant is particularly closely watched by the market," said David Kaegi, analyst at Bank Sarasin. "But it's encouraging that almorexant's efficacy was confirmed."

All Actelion had to say on the subject was that the company had made "certain safety observations." And Helvea analyst Olav Zilian noted that it could be nothing more than a trivial issue. Actelion will have plenty of time, though, to clear up the mystery surrounding its potential blockbuster--a drug that some analysts expect could earn $1.7 billion a year. More late-stage trials are planned to test long-term efficacy and safety. GlaxoSmithKline is partnered on the drug.

- here's the piece from the Wall Street Journal