Japan-Based Shinogi's COVID-19 Drug Associated With Birth Defects: Bloomberg

Shionogi & Co stock slumped 16% in Tokyo after preclinical studies showed its experimental COVID-19 drug disturbed fetal development, triggering concerns about its approval.
Kyodo News reported that the drug likely wouldn’t be recommended for pregnant women without giving attribution.
The animal data, which showed harm when given at high doses, was submitted to Japanese regulators in February when the company sought a priority review required for conditional approval, a Shionogi spokesman said.
The pill’s chance of commercial success fell to 5% from 50% after the report tying it to birth defects, making it less competitive, said Stephen Baker, an equities analyst at Jefferies & Co.
He cut his rating on the stock to “underperform” from “buy”, after trimming the profit estimates and target price.
“The Japanese will probably approve it but probably on strict conditions,” Barker said. “I think it will impact the company’s ability to conclude a licensing deal with a third party because I don’t think it will be a major commercial success.”
Merck & Co Inc’s MRK Lagevrio (molnupiravir) has a boxed warning saying pregnant women shouldn’t take it after it was linked to fetal harm in animal studies.
Pfizer Inc’s PFE Paxlovid at high doses led to a decrease in fetal body weight in a rabbit study, though there aren’t restrictions on its use during pregnancy.
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