The stock fell as much as 16% in Tokyo trading Wednesday, the biggest intraday decline since March 2011. The stock had been down 8.4% this year through yesterday.
The pill’s chances of success fell to 5% from 50% after the report tying it to birth defects, Stephen Baker, an equities analyst at Jefferies & Co., wrote in a note to clients. He cut his rating on the stock to “underperform” from “buy” on Wednesday after trimming the profit estimates and target price.
The possibility of birth defects isn’t new and shouldn’t affect approval, said Naomi Kumagai, an equities analyst at Mitsubishi UFJ Morgan Stanley Securities Co. in a note to clients. Reports by Japanese media are misleading, she said. Approval of Shiongi’s drug would give Japan, one of the world’s oldest nations, an indigenous supply of antiviral medication for Covid as it slowly eases social restrictions, reopens its economy and works to better control the disease in future outbreaks. Demand for drugs to treat Covid is fierce as the world transitions to an endemic state and the focus shifts to the need for easy-to-take medications.