Acrux falls 15% on sales warning

Recommended by Dr. Michael White, Updated on May 4th, 2015

Markets

Drug delivery company Acrux has warned it is at risk of missing its next milestone payment from distributor Eli Lilly because concerns about a potential link between testosterone replacement therapy and heart failure have hampered sales in the United States.

Acrux's lead product is Axiron, a therapy to treat hypogonadism, a condition of low or no testosterone in men. In January the US Food and Drug Administration said it would investigate whether TRT increased the risk of heart attack and stroke in some men.

The company and medical professionals have criticised the two studies upon which the FDA based its decision to reassess the safety of testosterone replacement therapy. The FDA has also not advised patients to cease their treatments.

Nonetheless the regulator's move had impacted the industry, Acrux said in an announcement to the market on Monday.

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"The US testosterone replacement therapy market has been impacted and unless this improves and/or Axiron's share of market increases, the next milestone may not be met in calendar year 2014," the company said.

Nervous investors have pushed Acrux stock down 15.7 per cent in early trading to $1.395 at 10:46am. The share price has plunged 63 per cent in the past year, despite Acrux delivering a special dividend at the beginning of the year.

The admission comes after an announcement in February that the company was on track to receive its 2014 milestone payment of $50 million, which would be payable in early 2015.

The company said on Monday that net sales reported by Eli Lilly in the three months ended March 31 increased 6.5 per cent to $US39.5 million ($42.5 million).

Link:

Acrux falls 15% on sales warning

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