AstraZeneca Plc, the U.K.'s second- largest drugmaker, fell the most in six months in London trading after European regulators revoked a patent for its Symbicort asthma inhaler.
AstraZeneca shares dropped 93 pence, or 3.6 percent, to close at 2,461 pence. The decline, the third biggest in the U.K.'s FTSE 100 Index, cut $2.8 billion from the company's market value.
The inhaler generated $1.02 billion in Europe in 2006, about 3.9 percent of AstraZeneca's annual revenue. The London-based drugmaker has had four experimental medicines fail in the last two years, increasing reliance on existing treatments such as Symbicort.
``The news may focus the market on other big risks in AstraZeneca that we believe are largely ignored and will lead to further discounting in the name,'' London-based UBS AG analyst Gbola Amusa wrote in a report today.
The patent, which was revoked yesterday, covered the manufacturing of Symbicort. The medicine still has other protection through at least 2010.
Seven companies challenged the protection, according to a statement from the European Patent Office Board of Appeals in Munich. No appeal is possible, said Rainer Osterwalder, a spokesman for the agency. ``The decision means that the situation now is as if the patent had never been granted,'' he said yesterday.
The European patent board backed a patent and amended two others on AstraZeneca's best-selling Nexium ulcer pill in a challenge by German generic-drug maker Ratiopharm on Oct. 9.
Four Failures
AstraZeneca has suffered setbacks in late-stage testing on heart treatment AGI-1067, blood thinner Exanta, Galida for diabetes and NXY-059 for strokes. As a result, AstraZeneca depends on its top three medicines for profit growth: Nexium, schizophrenia drug Seroquel and cholesterol therapy Crestor.
Amusa advised clients to sell AstraZeneca shares. He also reduced his estimate of the drugmaker's Symbicort sales in Europe from $1.7 billion in 2012 to $599 million.
``We believe yesterday's Symbicort news, on its own, is worth at least 2 percent downside based on free cash flows,'' Amusa wrote.
A patent protecting data exclusivity was unaffected by the ruling and remains in place until August 2010 in Europe, Amusa said. Other patents continue to cover the inhaler's process, formulation and delivery device, he said.
AstraZeneca said Symbicort will continue to be an important part of the company's growth in the European Union and elsewhere.
``We do not believe that the EPO decision will have an immediate impact in the EU or any impact on the U.S. or Japanese patents,'' Chief Executive Officer David Brennan said yesterday in a statement.
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