Crestor research program weighs on AstraZeneca shares

Aim is to prove pill is superior to Lipitor

LONDON - AstraZeneca PLC is entering a final phase in an unprecedented research program to prove its Crestor cholesterol pill is better than Pfizer Inc.'s Lipitor. The risk of failure is weighing down the UK drug maker's ailing stock.

The test, to be completed in 2011, is designed to prove Crestor's superior cholesterol-lowering ability means it can cut heart disease better than Lipitor. London-based AstraZeneca needs a clear win to persuade insurers to pay for Crestor when lower-priced, generic forms of Lipitor flood the market in 2010.

Crestor's $108-a-month tab has lost sales to generic copies of Merck & Co.'s cholesterol pill, Zocor, which can cost 80 percent less. AstraZeneca is banking that insurers will pay the higher cost if Crestor saves more lives. The study's uncertain result is one reason shares are down 26 percent in the past year and probably will continue to fall, says Edward Collins, who manages $197.5 million for New Star Asset Management in London.

"It's not a perfect hedge," said Collins, who sold most of his holdings in AstraZeneca this year, partly because so-called post-marketing studies add too much risk. "The demand for higher quality data has become more complicated than before and is an extra reason these stocks are out of favor."

Under siege from generics, AstraZeneca and other pharmaceutical companies are doing costly patient studies that risk hurting sales of products already on the market.

"We've got to be able to start demonstrating value in our clinical trial program," AstraZeneca chief executive David Brennan said. "You're looking for an incremental improvement in efficacy. It's required. Governments expect it."