Nov. 18 (Bloomberg) -- Chugai Pharmaceutical Co. shares had...

Nov. 18 (Bloomberg) -- Chugai Pharmaceutical Co. shares had their biggest fall in more than two years after U.S. and European regulators said they are investigating the deaths of 12 Japanese children who took the Tamiflu influenza medication, which is distributed by Chugai in Japan.

Chugai shares fell as much as 5.4 percent, or 155 yen, to 2,710 yen, the biggest decline since Jan. 22, 2003. It traded at 2,780 yen as of 12:31 p.m. on the Tokyo Stock Exchange.

Shares of the Tokyo-based company, which imports Tamiflu from Switzerland-based Roche Holding AG, have gained 65 percent this year as demand for the drug surged because of its potential in treating avian flu. The flu strain has killed at least 67 people in Asia since 2004, raising concern about an epidemic.

Of the 12 children that died after taking Tamiflu, four were due to ``sudden death, an unusual phenomenon in otherwise healthy'' people 16 and under, the U.S. Food and Drug Administration said in a report posted yesterday on its Web site.

A link between the deaths and Tamiflu has not been proven and may be coincidental, said Susan Bro, an FDA spokeswoman.

The deaths of the children in Japan have not been linked to taking Tamiflu, said Yuji Yamashita, the company's investor relations manager. The drug has been administered to 11.6 million adolescents of 15 years old and younger in Japan, he said.

``We shouldn't be too pessimistic only on this report,'' said Kenji Masuzoe, an analyst with Tokyo-based Deutsche Securities Ltd. ``So far no cause-and-effect relationship has been proved between the deaths and Tamiflu.'' Masuzoe said he reiterated a ``sell'' recommendation on the stock two days ago because it is overvalued.

European Decision

An FDA advisory panel will review Tamiflu risks today at a routine meeting under a law requiring monitoring of drugs that have been tested in children to win a certain type of regulatory approval.

The European Medicines Agency said yesterday it will ask Roche for ``a cumulative safety review of all available data on serious psychiatric disorders, including all case reports with a fatal outcome where Tamiflu was involved.''

About 11.6 million children in Japan have taken Tamiflu, said David Reddy, head of Roche's virology unit, on a conference call yesterday.

``This equates to a death rate of about one in a million,'' Reddy said. ``These deaths are not new and have occurred over the last several years.''

No deaths in children have been reported in the U.S., and 89 deaths occurred worldwide in all age groups, Reddy said.

To contact the reporter on this story:
Hiroshi Suzuki in Tokyo at [email protected]