Shionogi sinks in Tokyo trade after panel again delays COVID pill approval

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Shares in Shionogi & Co posted their steepest fall in three months on Thursday after a health ministry panel again delayed emergency approval for the Japanese drug-maker’s oral treatment against COVID-19.

The stock dropped 8.5% to 6,901 yen as of 10:22 JST, the most since April 13, leading decliners on the benchmark Nikkei index, which was down 0.4%.

Health experts on the panel voted on Wednesday to await more data from ongoing clinical trials and continue discussions on the drug, dealing another blow to Shionogi’s global ambitions for the antiviral pill.

“Shionogi bulls may now hang their hopes on new (Phase III) data that may become available in August and new Phase II/III data that may become available in September,” Jefferies analyst Stephen Barker wrote in a note.

Authorities had postponed a decision last month on the drug, known as S-217622 and the brand name Xocova, which Shionogi hopes will compete with products from US drug-makers Pfizer and Merck & Co that have already been approved in Japan and elsewhere.

The company has signed an agreement to sell about a million doses to the Japanese government, pending the drug’s approval.

Chief Executive Isao Teshirogi has said that annual production of the drug could reach 10 million doses.

It has received US government support for a global Phase III trial.

Speculation about the treatment has sent Shionogi’s shares on a rollercoaster ride.

Last month a health ministry panel postponed a ruling on the drug because of uncertainty over its effectiveness, as well as animal studies showing it could pose a risk to pregnancies.

Shionogi this month said it was preparing to seek approval in China for the drug, shown in pre-clinical studies to display high antiviral activity against the Omicron variants BA.4 and BA.5.

Some members of the health panel said that while trial data had not proved the effectiveness of the drug, the results were positive enough to grant emergency approval to help to tackle a seventh wave of infections and possibly reduce the incidence of so-called “long COVID” effects in patients.

New infections in Japan exceeded 150 000 on Wednesday, an all-time high, the Nikkei newspaper reported.