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AstraZeneca hit by German delay
LONDON, England (Reuters) -- AstraZeneca Plc said on Monday that Germany would not immediately approve cholesterol fighter Crestor, a potential multibillion dollar seller and its biggest new drug hope. News of the setback, which analysts expect to result in a delay of several months in launching the drug in the biggest European market, sent shares in Europe's second largest drugmaker down more than two percent by midmorning. AstraZeneca said Crestor, which has already been launched in the Netherlands and Canada, had been withdrawn from Europe's so-called ``mutual recognition'' process in Germany, as well as in Spain and Norway. Under this process, once one country has approved a drug, others normally follow suit, but each individual drug agency can still raise objections. A spokeswoman said AstraZeneca had been unable to agree aspects of the label for Crestor with drug authorities in the three countries, but declined to provide further details, saying they were confidential. She said the company still hoped to secure approval in these countries but added: "I can't put a timeframe on it.'' AstraZeneca said the mutual recognition process had been completed for 13 other European countries and launches would go ahead in these countries. MIND THE GAPCrestor is a key new product for AstraZeneca as it seeks to fill a gap left by declining sales of anti-ulcer pill Losec, sold as Prilosec in the United States, which is facing cheap, copycat competition. So-called "statin'' drugs, such as Crestor, are among the most widely used medicines in the world. But there have been concerns about their association with muscle problems following the withdrawal of Bayer AG's Baycol, which has been linked to more than 100 deaths. Shares in AstraZeneca, which have fallen 47 percent since last April on worries about the company's new drug pipeline, were 2.5 percent lower at 19.53 pounds by 1000 GMT -- the biggest losers in the FTSE 100 index. "It's a delay to launch in the largest statin market in Europe, so that is obviously going to delay sales. But I would be very surprised if it will mean that Crestor does not get on to the German market eventually,'' said Kevin Scotcher, a drugs analyst at SG Cowen, who recommends buying the stock. It is not the first time that Crestor has run into snags with the authorities. The drug's introduction in the United States -- the world's biggest and most profitable pharmaceutical market -- has also been put back by regulators. The U.S. Food and Drug Administration issued a so-called approvable letter for Crestor last year, but sought reassurances on the safety profile of the product at high doses, putting back the expected launch by around a year. It is now expected to go on sale in the U.S. in the third or fourth quarter of 2003. Crestor will compete in a fast growing market for statin drugs, currently worth $19 billion a year and growing by 15 percent annually. AstraZeneca is aiming to take a 20 percent share by competing head-on with rivals such as Pfizer Inc's Lipitor, the world's biggest selling prescription medicine. LEGACY ISSUESIndustry analysts believe Crestor could eventually generate peak sales worldwide of some $3 billion a year, given the drug's effectiveness at reducing levels of LDL, or "bad'' cholesterol which is linked to heart disease. But Navid Malik, an analyst at Williams de Broe who rates AstraZeneca a ``sell,'' said repeated delays in the drug's launch could undermine its competitive edge. "The legacy issues are building on this drug. If you are a physician and you keep reading about delays, it's not going to do much to boost your confidence in the product,'' Malik said. A decision by one country under the European mutual recognition procedure not to automatically approve a new drug is unusual but not unprecedented. Germany recently also opted to delay approval of Cripalex, an antidepressant from Denmark's Lundbeck, pushing back its launch by several months. Withdrawing a product from the process is a strategic option for a drug company. The alternative would be to seek arbitration at the European level, thereby delaying launch in other markets. Some analysts said German regulators may have been particularly sensitive about Crestor because of the controversy surrounding Baycol, which was marketed as Lipobay in Europe. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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