Glaxo Halts British Sales of Diabetes Drug

Glaxo Wellcome on Monday said it halted British sales of its new diabetes drug Romozin after five patients died in the U.S. and Japan from liver toxicity.

The move led to a decline in shares of Warner-Lambert Co., which markets the same drug in the U.S. under the name Rezulin. Analysts also said the U.S. Food and Drug Administration may have to consider whether it is now approving drugs too quickly, after years of being criticized for being too slow.

The drug, which was approved this year both in the U.S. and Britain, was considered one of two drugs that have driven the value of Morris Plains, N.J.-based Warner-Lambert to records this year. Analysts now say earlier forecasts that Rezulin may reach peak sales of $1 billion a year for Warner-Lambert may be too high.

Warner-Lambert shares fell $25.88, or 18.5%, to close at $114 in New York Stock Exchange trading.

Glaxo, which has European rights to the drug from Sankyo Co., the Japanese company that invented it, will be affected less, although analysts still forecast Romozin sales of about $456 million a year by 2000. American depositary receipts of Glaxo Wellcome fell 44 cents to close at $45.25.

“I think it’s fairly material for Glaxo,” said Vikram Sahu, an analyst at Credit Suisse First Boston. “It’s unlikely this drug will be back on the U.K. market any time soon.”

Sahu previously forecast Romozin would make up about 19% of the sales of newer Glaxo drugs by 2000, an important addition to a company that is suffering from the patent expiration this year of Zantac, once the world’s biggest-selling drug.

Analysts said problems with Rezulin may raise new questions about the speed at which the FDA approves products, particularly after Redux, a weight-loss product sold by American Home Products Corp., was withdrawn earlier this year after dozens of users developed heart valve problems.

The FDA, under political pressure to speed up approvals of lifesaving drugs, nearly doubled the number of novel drugs it approved in 1996 to 53 from 28 in 1995.

“The FDA has to think quite hard [about liver-toxicity problems],” said Paul Diggle, an analyst with SGST Securities Ltd. “Maybe they will have to be more careful.”

Glaxo, Britain’s biggest drug maker, said the drug has been used by an estimated 5,000 Type 2 diabetes patients in Britain and about 670,000 patients in the U.S. and Japan. Glaxo said none of the deaths were in Britain.

The drug, launched earlier this year in the U.S., was considered one of the most promising new treatments for Type 2 diabetes, a chronic disease that affects about 135 million people worldwide.

Last month, the FDA ordered Warner-Lambert and Sankyo to put a warning label on the drug after 35 reports of adverse liver side effects in patients. The labels tell doctors to give patients routine blood tests periodically during the treatment to monitor their health.

Warner-Lambert on Monday said it will again revise the labels.

Rezulin generated $242 million in the first nine months for Warner-Lambert and now has an 11% share of new prescriptions in the oral diabetes market, according to Goldman Sachs analysts. They estimate Rezulin will generate $1 billion in sales in 1998.