UCB drops 12% on Neupro batches recall

Belgian drugmaker UCB has had to recall all batches of its Neupro (rotigotine transdermal patch) Parkinson's disease treatment from the USA, as well as certain batches in Europe, after reports of reduced efficacy. The recall means that US pharmacies will be out of stock of the product by April 2008 and the firm has not given any indication of when new batches will be shipped.

The manufacturing issue is a big blow to UCB which has seen several pipeline delays recently, such as the European Medicines Agency's (EMEA) negative opinion on Cimzia (certolizumab pegol) in Crohn's disease (Marketletter November 26, 2007), as well as a hold up on epratuzumab in systemic lupus erythematosus on quality assurance issues (Marketletter October 2, 2006). On the day of the news, March 20, UCB shares fell 12% to 23.18 euros. In a statement, the firm said that, as a result of the recall, it will be updating its 2008 earnings guidance as soon as possible. This is a strong negative as Neupro was a major driver for growth in the short term and should have compensated for the decline in the anti-epileptic Keppra (levetiracetam) and the allergy treatment Zyrtec (cetirizine HCl), Natixis analyst Beatrice Muzard told Bloomberg news. She expects the recall to lead to a delay of about 18 months.