Aug. 11 (Bloomberg) -- Astellas Pharma Inc. faces competition for its Prograf drug for the first time as Novartis AG began selling a copy, threatening sales of the Japanese company’s biggest revenue generator. Astellas shares fell the most in five months.

Sandoz, a Novartis unit, said today it introduced a generic version of the drug in the U.S., the world’s largest pharmaceutical market. Prograf is the world’s best-selling drug to stop transplanted organs from being rejected and accounts for about 20 percent of sales at Tokyo-based Astellas.

Global sales of Prograf will drop by 10 percent to 20 percent annually starting this year, according to Kenji Masuzoe, a Tokyo-based analyst at Deutsche Bank AG. Shares of Astellas also declined after the U.S. Food and Drug Administration rejected its petition to require tests to prove the safety and efficacy of immune-system suppressants, which include Prograf.

“Sales will fall even though it won’t be as rapidly as for drugs such as diabetes medicines because doctors will be careful about switching treatments for something life-threatening like organ transplants,” Masuzoe said by telephone from Tokyo.

Masuzoe projects Prograf sales in the U.S. will fall 24 percent to $676 million in the two years ending March 31, 2011. The FDA approved Sandoz’s copy yesterday, according to the agency’s Web site.

Astellas dropped 4.9 percent to close at 3,690 yen in Tokyo trading, the largest decline since March 10. The benchmark Nikkei 225 Stock Average gained 0.6 percent.

Challenge Petition

The FDA also denied Astellas’s request in the petition, filed in September 2007, for a requirement that doctors be notified whenever a substitute oral medicine is about to be provided to a transplant patient, Astellas said today. The Japanese drugmaker plans to challenge the FDA’s decision on its petition at U.S. District Court in Washington.

“Transplant patients are vulnerable to small differences in drug concentration, which can lead to significant difference in their treatment outcome,” William Fitzsimmons, senior vice president of drug development, said in a statement.

Prograf lost key patent protection in the U.S. in April 2008 and in Europe in June this year. Global sales of the medicine fell 0.4 percent to 52 billion yen ($537 million) in the quarter ended June 30.

To contact the reporter on this story: Kanoko Matsuyama in Tokyo at kmatsuyama2@bloomberg.net

Last Updated: August 11, 2009 03:04 EDT