AstraZeneca's Seroquel gets FDA approval

Seroquel, already on sale to treat schizophrenia and depressive or manic episodes, is AstraZeneca's second-biggest selling drug, generating $4 billion of sales in 2007, but it is facing strong potential generic competition.

The new ruling from the U.S. Food and Drug Administration means that patients may take the drug as an adjunct to the already widely used medicines lithium and divalproex for maintenance treatment of bipolar I disorder.

AstraZeneca said bipolar disorder currently affects about 8 million adults in the United States.

Bipolar I disorder is a severe, lifelong form of mental illness characterized by severe mood swings ranging from mania to major depression that will affect between 0.4 percent to 1.6 percent of people over their lifetime.

Shares in AstraZeneca, which is facing the prospect of strong generic competition to Seroquel, rose 1.3 percent to 2,118 pence ($41.05) after the announcement.

WestLB analyst Simon Mather said the FDA approval was positive, but did not expect it to have "any major impact on the share price," noting that the ongoing patent struggle between AstraZeneca and Teva Pharmaceutical Industries Ltd. and Novartis AG's Sandoz Inc. unit is more important.

Teva and Sandoz have applied for approval to market cheaper versions of Seroquel in the U.S. before a key patent expires in 2011.

Mather said that if AstraZeneca is successful in defending the patent surrounding Seroquel and the issue is resolved at a summary judgment hearing in June, "we would expect a much greater share price reaction."

In the meantime, AstraZeneca is working hard to promote a follow-on, extended release version of the drug called Seroquel XR, to protect its sales.