Watch Live

Tweet TWEET

Richter Drops Most in Year as FDA Rejects Drug: Budapest Mover

Gedeon Richter Nyrt., Hungary’s biggest drugmaker, headed for the steepest drop in almost a year after a U.S. regulator denied approval to a drug that lies at the heart of the company’s growth plans.

The shares fell 2.8 percent to 4,237 forint by 11:18 a.m. in Budapest, the most since Nov. 27, 2012 on a closing basis. Volume of trading was 91 percent of the stock’s three-month daily average. Richter led the benchmark BUX stock index, in which it has a 24 percent weighting, lower by 0.7 percent.

The Food and Drug Administration issued a “complete response letter” stating that while Cariprazine “clearly demonstrated effectiveness” it requires more work, a statement from Richter and partner Forest Laboratories Inc. cited the FDA as saying. The authorization for the drug, used to treat schizophrenia and mania associated with bipolar disorder, may be delayed by more than a year, Barclays Plc analysts wrote in an e-mailed report.

“We would rather envisage the need for additional trials,” Barclays analysts including Simon Mather in London wrote in the report. “Given today’s news, we expect the associated sentiment-hit to add pressure to the share price.”

Richter plans to rely on Cariprazine and Esmya, a gynecological drug, to boost revenue by the end of the decade, Chief Executive Officer Erik Bogsch said in an interview on Sept. 27.

“We are committed to pursuing novel treatment options like cariprazine to address patient needs,” the companies said in their statement today. “Forest and Richter plan to meet with the FDA in the very near future to discuss the complete response letter and define a path forward.”

To contact the reporter on this story: Andras Gergely in Budapest at agergely@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.