When Bad News Hits, Drugmakers May See Stock Prices Fall

Recent bad news on diabetes drugs resulted in loss of pharmaceutical manufacturers' stock values.

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When particularly bad news about a medication makes the news, a decline in stock prices for the drug's manufacturer may well follow. With diabetes drugs, this has happened at least three times in the past few years.

* Sanofi-Aventis, the maker of Lantus, a form of insulin, saw its shares slump in late June, after four observational studies suggested that the drug might be tied to an increased risk of cancer.

* Shares of GlaxoSmithKline fell 13 percent during a nine-day period in 2007, because of concern about heart risks that researchers linked to Avandia.

* Takeda Pharmaceutical Co. saw its shares drop in late June after the company said it expects a delay until 2012 in getting Food and Drug Administration approval of a diabetes drug called alogliptin. The FDA has asked Takeda to conduct a clinical trial to assess the drug's cardiovascular safety.