Shares of Shionogi & Co plunged in Tokyo trading on Wednesday after a media report said the Japanese drugmaker’s oral treatment for Covid-19, which is still awaiting approval from regulators, could be linked to birth defects.
The company may recommend against the use of its antiviral pill by pregnant women after animal testing found foetal abnormalities, Kyodo News reported on Tuesday, citing a source familiar with the matter.
The company did not immediately respond to a request for comment about the report. Its shares sank more than 15%, and were set for their biggest one-day loss since 1987.
Shionogi last month signed a basic agreement to sell the drug, a protease inhibitor known as S-217622, to the Japanese government, with plans to supply about a million doses, pending approval by regulators.
The company filed for approval in February for the pill, which would become Japan’s third antiviral approved for coronavirus patients, following those developed by Pfizer and Merck & Co.
The company has global aspirations for the treatment, with plans to launch a Phase III trial worldwide with US government support. Chief executive Isao Teshirogi has said production could reach 10 million doses a year.
Jefferies analyst Stephen Barker cut Shionogi to “underperform” from “buy”. He said in a note to clients on Wednesday that the birth defect concerns reduced the chances of success of the Covid-19 treatment from about 50% to 5%.
- Reuters, with additional editing by George Russell