Japanese drugmaker Takeda Pharmaceuticals saw its shares plunge 13 percent--the daily limit--in morning trading amid concerns that the company's diabetes drug candidate, alogliptin, faces regulatory delays. The fears stem from the drugmaker's announcement Friday that new cardiovascular safety guidelines issued in December will be retroactively applied to the drug candidate. The company also said the current amount of clinical data doesn't meet the standards of the new guidelines.
Alogliptin is a dipeptidyl peptidase IV (DPP-4) inhibitor, a new class of diabetes meds becoming increasingly popular since the success of Merck's Januvia. The dug candidate is being evaluated as an adjunct to diet and exercise for the treatment of type 2 diabetes. Developed by PPD, it has been touted as the replacement for the best-selling diabetes drug Actos. The milestone payment for the med was delayed last year after the FDA failed to meet the October 27, 2008 review deadline due to "internal resource constraints." Now PPD says it does not expect the promised $25 million milestone payment this year either.
The FDA has said it will make a decision on alogliptin's status by the June 26 deadline previously set. Federal regulators have been cautious of diabetes drugs since data from post-market studies of Avandia showed an increased risk of heart attacks. Takeda's Actos and Avandia are in the same class of drugs known as thiazolidinediones, or TZDs.
According to MarketWatch, some analysts are hoping for the best, while others are expecting the worst. UBS analyst Hirohisa Shimura says that in a best case scenario, Takeda could still be able to use a combo of data on the med to push its app through for a June approval. UBS buy rating and price target remains unchanged. J.P. Morgan, on the other hand, leaned towards UBS worst case scenario, which is that FDA approval could be delayed by 3 years. The firm cut its price target from 3,900 yen from 4,600 yen.
"We think this increases the probability of a major setback to Takeda's strategic support and expansion of its global diabetes franchise built on Actos," J.P. Morgan analyst Masayuki Onozuka wrote in a note. "We now have confirmation that the FDA is toughening its review process on top of indications of health-care reform in U.S. budget proposals," Onozuka wrote. "As the stock symbolizes the sector, Takeda looks vulnerable to underperformance, in our opinion, now that the risk of health-care reform is also surfacing in Japan."
- check out Takeda's release
- view PPD's release
- read the Chicago Tribune story
- see the Forbes story
- read the MarketWatch story