May 26 (Bloomberg) -- Dainippon Sumitomo Pharma Co. plunged by a record in Tokyo trading as it suspended a study on an experimental drug for colorectal cancer and at least two brokerages cut their ratings on the stock.
The shares closed 21 percent lower at 1,158 yen, the biggest retreat since Bloomberg began tracking the data. The stock didn’t trade at the open because sell orders outnumbered bids. Biggest shareholder Sumitomo Chemical Co. dropped 5.2 percent.
Dainippon Sumitomo stopped the study after an independent safety monitoring committee said the drug for advanced colorectal cancer, called BBI608, failed to meet the criteria set for managing the disease, it said in a May 23 statement after Tokyo markets closed. There was no safety concern, according to the company.
The Japanese company is examining the financial impact from the suspension of the trial and will make a disclosure promptly if necessary, it said. The study was in the last stage of patient studies generally required for a regulatory review and compared the efficacy of the medicine against a placebo. The drug is being tested for other types of cancer and the company will proceed with development, it said.
Yasuhiro Nakazawa, a health-care analyst at SMBC Nikko, cut the stock to neutral from outperform, saying the timing of the study’s suspension was a negative surprise. Nomura Securities Co. cut its rating to neutral from buy.
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