Broker to blame for fall, says AcruxREBECCA URBAN THE AUSTRALIAN...

Broker to blame for fall, says Acrux

REBECCA URBAN THE AUSTRALIAN FEBRUARY 06, 2014 12:00AM

DRUG developer Acrux has singled out a Macquarie research report for blame as its shares slumped to an almost four-year low, accusing the broker of misrepresenting recent studies linking testosterone therapies with cardiac problems.

Shares in Acrux, which gets significant royalties on global sales of its testosterone replacement therapy Axiron, slumped 10 per cent on Tuesday and a further 10 per cent early yesterday, following news the US Food & Drug Administration was investigating the risks of heart attack and stroke in men taking approved testosterone therapies.

The company argued that such probes were not uncommon. "The FDA stated that patients should not stop taking prescribed testosterone products without first discussing any questions or concerns with their healthcare professionals," Acrux said in response to a price query issued by the Australian Securities Exchange.

"A report was publicised and circulated on the 4th of February which misrepresented the . . . conclusions and the FDA (investigation) and Acrux believes that this triggered the recent trading in its securities."

An Acrux spokesman confirmed that the "report" referred to came from Macquarie healthcare analyst Craig Collie, who has an "underperform" rating on the stock and price target of $1.80, below market consensus. Mr Collie declined to comment, but is said to be standing by his report, which warned that the "discretionary nature" of testosterone replacement therapy meant the impact of the FDA review could be "meaningful".

"When safety issues are raised with medicines (that) reduce morbidity or the risk of mortality, the impact to volumes tends to be mitigated by the risk of stopping the medication," the report said.

"Testosterone replacement therapy, for example, is predominately used for lifestyle reasons (such as energy levels, sex drive), meaning this offset is less powerful and volumes are more sensitive to safety concerns in our view."

The FDA investigation has been sparked by the recent publication of two studies, including one in the Journal of the American Medical Association that found a 30 per cent higher risk of cardiac events in men taking testosterone replacement therapy.

Acrux, however, stressed that the studies had been observational only and had been carried out before Axiron, a transdermal treatment applied similar to a roll-on deodorant, was on the market. The company said the studies suggested an "associative link" rather than "cause" and noted that the findings were not new. Axiron labels contain warnings about potential cardiovascular risks.