Two cheers for AstraZeneca

ASTRAZENECA has moved closer to getting the green light to launch a new cholesterol-lowering drug that could transform prospects of the Anglo -Swedish pharmaceutical giant. But the stock market cancelled victory celebrations when it emerged the powerful US drugs regulator has held off from giving the full go-ahead for the treatment, called Crestor.

In a statement that left many analysts puzzled, the group said it had received an 'approvable letter' from the US Food and Drug Administration. That falls short of a blank cheque to sell the drug and allows time for the authorities and the company to consider other issues. Peter Cartwright at Williams de Broe said: 'It is good news that Crestor is approvable - but we don't know whether it is fairly good news or very good news.' The confusion saw the share price soar 89p to 3095p before closing 56p lower at 2950p on Wednesday.

The interest surrounding Crestor has been heightened not just by its importance to AstraZeneca, but because of health concerns raised when German group Bayer was forced to withdraw its cholesterol treatment Baycol. The drug had been linked with several deaths and side-effects. Broker Dresdner Kleinwort Wasserstein last week claimed similarities in chemical structure between Baycol and Crestor and suggested it may not gain FDA approval.

The FDA has come under growing pressure to impose stiffer safety guidelines on new drugs. Analysts believe that it may not give approval for larger doses of Crestor. This would limit sales estimated to top £4bn by 2008.

AstraZeneca wants to be able to sell Crestor at a 10-milligram starting dose rather than 5 milligrams to differentiate it from market leader Lipitor, made by Pfizer.

AZ has spent hundreds of millions of pounds developing Crestor. It is anxious to bolster its pipeline of new products as existing best sellers lose patent protection.

Chief executive Tom McKillop is fighting a case in the US courts to defend patents on Losec, its ulcer drug, which has accounted for 40% of sales.