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 Amgen, its partner on the project, announced late on Friday it
was ending a collaboration to develop brodalumab after suicidal
thoughts were observed in patients taking the medicine.
Shares in AstraZeneca fell 1 percent on Tuesday in the wake of the
news, following a long holiday weekend in Britain.
Deutsche Bank analyst Richard Parkes said the setback was a surprise
and terminating the drug's development would hit long-term consensus
forecasts for AstraZeneca's earnings by around 2 percent.
Although the British group said it was still considering whether to
scrap the product or continue on its own, the drug's prospects now
seem badly tarnished with Amgen declaring that safety concerns would
likely result in restricted use.
AstraZeneca and Amgen have been sharing development of brodalumab
since 2012 as a treatment for psoriasis, psoriatic arthritis and
axial spondyloarthritis. It works by blocking a molecule involved in
inflammation called interleukin-17 (IL-17).
Novartis already markets a psoriasis drug called Cosentyx that binds
to a related protein, IL-17A, without any problems involving
suicidal thoughts, and Eli Lilly has a rival in development.
Barclays analysts said AstraZeneca might still decide to continue
development on its own, but with the Novartis drug showing a clean
bill of health and Eli Lilly aiming to submit its IL-17 for approval
by mid-year "the commercial perspectives are clearly very
challenging".
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AstraZeneca gave its long-term $45 billion sales forecast a year ago
when it was fending off a takeover bid by Pfizer. It said at the
time that estimates for annual brodalumab sales were between $500
million and $1.5 billion.
The company made $26 billion of revenues last year.
(Editing by Mark Potter)
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