Gedeon Richter Nyrt., Hungary’s biggest drugmaker, dropped to the lowest in two weeks after a U.S. regulator denied approval to a drug that lies at the heart of the company’s growth plans.
The shares fell as much as 3.3 percent and lost 1.1 percent to 4,310 forint by close in Budapest, the lowest since Nov. 7. The volume of trading was almost double the stock’s three-month daily average. The benchmark BUX stock index rose 0.6 percent helped by a 2 percent advance in OTP Bank Nyrt., the gauge’s heaviest component.
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 mania associated with bipolar disorder and schizophrenia, 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.”