Aug. 19 (Bloomberg) -- Novo Nordisk A/S, the world's biggest insulin maker, expects U.S. regulators to require stronger warnings on its experimental diabetes medicine liraglutide after two patients using a similar treatment died.

The U.S. Food and Drug Administration yesterday called for stronger warnings Eli Lilly & Co. and Amylin Pharmaceuticals Inc.'s Byetta after two patients died because of inflamed pancreases. The deaths, together with heart problems linked to GlaxoSmithKline Plc's Avandia, are likely to make regulators more stringent, Novo Nordisk's Chief Scientific Officer Mads Thomsen said today in a telephone interview.

The Danish company this year sought U.S. and European regulatory approval to begin selling liraglutide, a synthetic version of the naturally occurring hormone called GLP-1 that stimulates the pancreas to make insulin. Patients getting Novo Nordisk's liraglutide in clinical trials didn't develop inflamed pancreases at a greater rate than diabetics getting other kinds of treatments, Thomsen said.

``We haven't seen any statistically significant difference,'' Thomsen said.

Novo Nordisk fell as much as 11 kroner, or 3.5 percent, to 300 kroner and declined 10.5 kroner, or 3.4 percent, to 300.5 kroner as of 1:04 p.m. That gave the company a market value of 191 billion kroner ($36.7 billion).

``Given the market is already focused on the risk, albeit small, of a cardiovascular trial being required pre-approval for liraglutide, the incremental news on pancreatitis will not help confidence,'' Peter Verdult, an analyst at Citigroup Global Markets, said in a note to investors today.

Takeda's Actos

In 2007, eight years after Glaxo began selling Avandia, the FDA required that it and Takada Pharmaceuticals Inc.'s Actos carry the strongest possible warnings of increased risk of heart failure. Additional studies showed Avandia also raises the risk of heart attacks. The FDA now is considering requiring additional trials of all diabetic drugs to assess cardiovascular risks.

The ``news on Byetta suggests potential risk with the development of other GLP-1 programs, including those by Novo Nordisk,'' Jack Scannell, an analyst at Bernstein Research, said in a note to investors. ``Regulatory delays, greater scrutiny and tougher labeling with these programs would represent a source of downside.''

Roche Holding AG, Switzerland's biggest drugmaker, is also developing a GLP-1 medicine against diabetes. The company didn't immediately respond to a request for comment.

Obesity Treatment

Liraglutide could generate U.S. sales of $1.7 billion if approved for diabetes and $2.35 billion globally if approved for diabetes and obesity, Scannell said. Novo Nordisk is also testing the drug as an obesity treatment.

In addition to stimulating insulin production, the drug appears to help rejuvenate the cells of the pancreas, leading researchers to suggest that liraglutide and similar treatments might be able to stop and possibly even reverse the worsening of diabetes.

Normally, patients' organs fail over time, eventually requiring them to have insulin shots. Without enough insulin to transform the food into energy, glucose collects in the bloodstream, where it can cause blindness, heart problems and kidney failure.

``With the hype about GLP-1 analogues changing the treatment paradigm for type-2 diabetes already calming down, and the anemic prescription growth being posted by Byetta, we believe today's news will lead investors to further question some of the liraglutide peak sales forecasts in the market,'' Citigroup's Verdult said.

The analyst estimates sales of $2.3 billion. Market forecasts vary between $1 billion and $6 billion, he said.

To contact the reporter on this story: Frances Schwartzkopff in Copenhagen at fschwartzkop@bloomberg.net

Last Updated: August 19, 2008 07:53 EDT