UPDATE 3-Roche, Ipsen drug faces at least 12-18 month delay

* Roche had previously aimed for regulatory filings in 2011

* Change in clinical trial protocols causes delay

* Follows hypersensitivity reactions in some patients

* Ipsen shares down 15 pct, Roche 2.5 pct; Novo up 3.3 pct
(Adds more analyst comment, detail on Roche strategy)

By Ben Hirschler

LONDON, June 18 (BestGrowthStock) – An experimental diabetes drug
being developed by Roche (ROG.VX: ), under licence from French
group Ipsen (IPN.PA: ), faces a delay of at least 12-18 months
after hypersensitivity problems were seen in some patients.

The setback raises questions about the commercial potential
of taspoglutide in diabetes — a disease that is on the rise
worldwide and is a key focus for many drug companies.

“Now the product can’t launch before 2014. We question to
some extent whether it can be launched at all,” Jefferies
industry analyst Jeffrey Holford said.

He expects the main beneficiary to be Novo Nordisk’s
(NOVOb.CO: ) drug Victoza, which is already on the market and
belongs to the same Glucagon-like peptide (GLP-1) class.

Swiss-based Roche said on Friday it was implementing a risk
mitigation plan in the taspoglutide Phase III programme
following cases of hypersensitivity reactions to the medicine.

“The impact of this plan on the project and in particular on
the timelines for regulatory filing are currently being
assessed, however, a minimum of 12 to 18 months delay is
anticipated,” Roche said.

It had been aiming to file taspoglutide worldwide in 2011,
implying a market launch a year later.

Roche shares were down 2.5 percent by 0903 GMT, while Ipsen
— a much smaller company whose fortunes are tied closely to the
experimental compound — tumbled 15 percent.

SALES FORECASTS SLIDE

The most common symptoms in patients with hypersensitivity
reactions were skin reactions and gastrointestinal symptoms,
while cardiovascular and respiratory symptoms were less
frequent. All patients recovered without complications.

Roche has said in the past that taspoglutide could see peak
sales of at least 2 billion Swiss francs ($1.77 billion) if it
gets to market.

Analysts, however, had already become more wary about the
drug’s prospects before Friday’s news, following tolerability
problems reported in scientific abstracts to be released at a
big U.S. diabetes meeting this month.

As a result, consensus 2014 sales forecasts are a relative
modest $490 million — a figure that now looks set to tumble
further.

The once-weekly injection would be a rival for Eli Lilly
(LLY.N: ) and Amylin’s (AMLN.O: ) Byetta and Novo Nordisk’s Victoza,
the two established GLP-1 drugs. But several other drugmakers
also have experimental GLP-1s in development.

Novo shares were up 3.3 percent on the setback for the Roche
product, which Morgan Stanley analysts said looked increasingly
less competitive against the growing competition in the GLP-1
class.

For Roche, given its size, the problems with taspoglutide
will not have a significant financial impact. But Deutsche Bank
analyst Tim Race said they would hurt investor sentiment, since
taspoglutide was part of Roche’s strategy to expand sales
outside of oncology and into the primary care setting.

Roche exercised its licensing option for taspoglutide from
Ipsen in 2006 and acquired exclusive worldwide rights to develop
and market the drug, except in Japan where these rights are
shared with Teijin and in France where Ipsen has retained
co-marketing rights.

Stock Market Research Tools

(Additional reporting by Anna Ringstrom in Copenhagen; Editing
by Hans Peters, Mike Nesbit)
($1=1.130 Swiss Franc)

UPDATE 3-Roche, Ipsen drug faces at least 12-18 month delay