Hikma Pharmaceuticals plc (HKMPY) shares plunged the most in nine months in early London trading Thursday after the drugmaker said that approval of its generic Advair Diskus asthma treatment faces delays from the U.S. Food & Drug Administration.
The generic drugmaker said that it has received a 'complete response letter' from the FDA and that, as a result, it now sees a "low likelihood of approval this year".
Hikma stock fell by more than 8% in the opening 30 minutes of trading to change hands at 1,773 pence each, extending its two-day decline to just under 10%, with Thursday's fall coming against a 0.04% gain for the Stoxx Europe 600 TMI Pharmaceuticals index.
"Hikma is committed to bringing this important product to the US market and will work collaboratively with the FDA to address their outstanding questions," the company said in a statement.
Hikma had been banking on approval from the FDA, even going as far as to forecast double digit revenue growth for 2017 in its latest annual report, most of which was attributed to the anticipated approval of Advair Diskus.
"Certain new launches are expected to contribute around 15% of Generics revenue in 2017, primarily generic Advair, which is assumed to be launched in the second half of the year," the company said in its latest annual report," it said.
The shares were down by around 3% during noon trading in London Wednesday, prompting questions over whether the decision, anticipated on May 10, had made its way to the market on the quiet or if investors were suddenly becoming bearish on the drug's prospect for success.
Advair is a blockbuster asthma treatment pioneered by GlaxoSmithKline plc (GSK - Get Report) although it lost the patent in 2010 and has since been bracing for a flood of generics to hit the market. Glaxo stock was unchanged during early trading in London.
Vectura, which participates in a joint venture with Hikma on Diskus, also fell by nearly 10% during early trading in London, suggesting investors are becoming increasingly bearish on the likelihood of further generics reaching the market in the near term.
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