Menopause pill by Wyeth fails to get FDA nod

NEW YORK --Wyeth, the world's largest maker of hormone treatments, has unexpectedly failed to win federal approval for its experimental menopause pill, Pristiq.

Its share price underwent its biggest drop in five years, erasing $7.7 billion of market value.

The Food and Drug Administration sent Wyeth a so-called approvable letter yesterday asking for more data on the drug's heart and liver effects, and outlining the need for at least one more year of clinical tests, the Madison, N.J.-based company said yesterday in a statement.

Wyeth had forecast annual revenue of $2 billion for Pristiq, and said yesterday it remains committed to developing the pill for menopause symptoms such as hot flashes and night sweats.

Pristiq is derived from Wyeth's top seller, the antidepressant Effexor, which generated $3.7 billion last year. Wyeth needs sales from Pristiq to offset lost revenue when Effexor faces competition from cheaper generic copies in 2010.

"This is a disaster," said Barbara Ryan, an analyst with Deutsche Bank in New York, in a telephone interview yesterday.

"With the delay for new trials, Pristiq probably won't be approved until after Effexor goes generic, at which point people won't see a reason to choose Pristiq over generic Effexor."

Wyeth's shares fell $5.70, or 10.2 percent, to $50.30 in New York Stock Exchange composite trading yesterday. The fall is the most since a 19 percent plunge on Sept. 27, 2002, when Wyeth cut its forecast after a US study linked its hormones, Premarin and Prempro, to heart attacks and breast cancer. Before yesterday, the stock had gained 10 percent in 2007, beating a 5.4 percent rise in the 14-member Standard & Poor's 500 Pharmaceutical Index.

The Pristiq delay wiped out $7.67 billion in Wyeth's market value, based on the 1.34 billion shares outstanding on April 30, according to a Securities and Exchange Commission filing.

UBS Investment Research analyst Roopesh Patel downgraded Wyeth to "neutral 1" from "buy 1" and cut his target price to $57 from $65. Standard & Poor's downgraded Wyeth to "hold" from "buy" and lowered the target price by $5 to $57.

Pristiq, if approved, would be the first nonhormonal treatment for menopause symptoms. Wyeth received an FDA approvable letter for Pristiq for depression in January, and yesterday said it expects a decision for that use in early 2008.

Like Effexor, Pristiq raises levels of two brain chemicals, serotonin and norepinephrine, that help carry signals between neurons. Research has shown that symptoms of menopause, such as hot flashes, are related to a deficiency of serotonin, which also regulates body temperature. Hot flashes can be accompanied by a rapid heart beat, dizziness, muscle weakness, and fatigue.

Wyeth chief medical officer Gary Stiles said the company hasn't been asked to give the FDA more data on Pristiq for depression, and that the delay for menopause symptoms shouldn't influence an FDA action on the other use.

Stiles didn't detail the severity of heart and liver effects found in studies of Pristiq submitted to the FDA for approval.

Elevated liver enzymes, which can signal potential damage to the organ, were found in three of 2,000 women tested in company-sponsored trials, Stiles said.

Enzyme levels returned to normal when patients stopped taking Pristiq.

The FDA was also concerned about cardiovascular events from one of four studies, Stiles said.

He said he didn't believe the cardiovascular problems were caused by the drug.