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Nexium off to slow start?
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November 14, 2000: 2:53 p.m. ET
AstraZeneca's stock slips following report stoking fears about new drug
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NEW YORK (CNNfn) - Shares of Anglo-Swedish drug maker AstraZeneca PLC slipped about 3 percent in London and New York Tuesday after a Swedish newspaper report sparked worries about the sales performance in Sweden of the company's key new ulcer treatment, Nexium.
The newspaper Dagens Industri reported Tuesday that Nexium achieved sales of only 2 million krone ($199,000) in Sweden last month  and the paper quoted a local AstraZeneca spokesman as saying that the switch to Nexium from Prilosec, the company's best-selling ulcer drug which is facing patent expiration, has not been as fast as hoped.
Prilosec (known as Losec outside the United States) has lost its patent exclusivity in several European markets. The drug had sales of nearly $6 billion last year and is the world's top-selling medication.
Following the report, AstraZeneca's American depositary receipts fell 3.3 percent, closing down $1.63 at $48.06 at 4 p.m. ET in New York. In contrast, most other large-cap drug companies traded higher amid a broad U.S. market rally. In London, shares lost 100 pence to 3,270 pence.
A spokeswoman at AstraZeneca's U.S. headquarters in Wilmington, Del., told CNNfn.com that the Nexium roll-out only began in Sweden on Aug. 1 and it is too early too assess the drug's sales performance there.
The company has marketed the drug only to specialists and has not yet introduced it to general practitioners, AstraZeneca spokeswoman Rachel Bloom-Baglin said.
The drug is also now available in the U.K. and Germany, both of which are much bigger markets than Sweden. In its third-quarter earnings announcement last month, AstraZeneca said total Nexium sales reached about $4 million in the third quarter, and the drug was on track to become one of the fastest-prescribed new medication in UK history.
Nexium's sales performance so far in the UK and Germany "gives us encouragement in terms of sales in terms of the other markets in which we intend to launch Nexium," Bloom-Baglin said.
Pharmaceutical industry analyst Sergio Traversa, of ING Barings, said the sell-off of AstraZeneca stock was not justified. The brokerage firm has a "buy" rating on AstraZeneca stock.
The key to Nexium's success will be the U.S. market, not the Swedish or British markets, he said.
"These markets are completely noncomparable," he said. Traversa estimates that Nexium sales could reach $3.5 billion to $4 billion worldwide each year at the drug's peak, including about $2.5 billion in U.S. sales.
Nexium is expected to go on the U.S. market next year, pending approval by the Food and Drug Administration.
But some analysts have questioned the sales potential of Nexium, saying they are unclear whether the drug is superior enough to Prilosec to sway doctors into prescribing it instead of a cheaper, generic version of the older product.
In its third-quarter report last month, AstraZeneca warned that competition in the ulcer drug market likely would reduce full-year sales growth to about 8 percent, down from previous expectations of double-digit sales gains. 
-- from staff and wire reports
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AstraZeneca
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