Ariad Pharmaceuticals Inc. said Friday that the Food and Drug Administration approved its pill Iclusig as a treatment for two rare types of leukemia, but shares of the company tumbled after regulators required the addition of warning label alerting patients to potentially serious side effects.
Iclusig, which was developed under the name ponatinib, was approved for use against treatment-resistant chronic myeloid leukemia and for patients with acute lymphoblastic leukemia with a type of chromosome abnormality. It is Ariad's first approved product.
The company says approximately 5,000 cases of chronic myeloid leukemia are diagnosed in the U.S. each year. The FDA approved the drug sooner than expected, as its decision wasn't due until late March. European Union regulators are also reviewing the drug and are expected to make a decision in the third quarter of 2013.
Federal regulators will require Ariad to include a boxed warning that Iclusig may cause blood clots and liver toxicity.
Citi Investment Research analyst Jonathan Eckard, who rates the stock a "Buy," noted that he doesn't expect the warning to dramatically affect the drug's adoption since "physicians treating these patients are likely broadly familiar with the adverse effects caused by this disease and prior treatment, and will be able to assess these warnings with what they would normally expect," he wrote in a note.
Ariad is also testing Iclusig as a primary treatment for chronic myeloid leukemia and acute myeloid leukemia, and is conducting earlier studies of the drug as a treatment for solid tumors.
Ariad Pharmaceuticals stock lost $4.95, or 21 percent, to $18.93 on Friday. The shares are up 82 percent over the last 12 months. In October the stock peaked at $25.40, its highest price since early 2000.