By Michael Shields <br> <br>ZURICH, April 27
(Reuters) - Roche Holding AG's patchy reputation in
<br>bringing new drugs to market was dealt a fresh blow on
Friday after U.S. <br>regulators sought more information
on clinical trials for a key new drug. <br><br>The
company said it still hoped to launch hepatitis C
medicine Pegasys on <br>schedule, but could not rule out a
delay. <br><br>The stock market reacted poorly to news
of a potential stumble in rolling <br>out the Swiss
drug and diagnostics group's most important new
medicine <br>this year. <br><br>Traders said the news
could add pressure on Roche to do a major
<br>acquisition or merger to bolster its weak product pipeline,
but financial <br>analysts argued it was too early to
hit the panic button until the problem <br>with
Pegasys was clearer. <br><br>Roche certificates, which
have been fallen as much as 30 percent this year
<br>amid slack sales at Roche's flagship drugs division,
fell 4.4 percent to <br>11,750 Swiss francs before
recovering somewhat to 12,045 in a generally <br>weaker
market. <br><br>"We hope that (a delay) is not going to
happen. This depends on the <br>quality of the questions.
Our experts are looking into this now," a Roche
<br>spokesman said. <br><br>"I would not say there is an
immediate delay to the whole thing. This <br>cannot be
completely ruled out, but there is not an immediate
indication <br>for that," he added. <br><br>This depended in
part on when talks with the U.S. Food and Drug
<br>Administration could take place. <br><br>Roche had applied last
May for U.S. marketing authorisation of Pegasys, a
<br>longer-lasting version of its interferon drug Roferon-A that was
expected <br>to be one of its key sales drivers at a time
of listless pharmaceutical <br>turnover growth.
<br><br>It had expected to start selling the drug in the
U.S. market in the fourth <br>quarter of 2001.
Analysts have estimated the drug could have annual sales
<br>of close to a billion francs by 2004.
<br><br>Commerzbank said in a research note that it was downgrading
Roche to <br>"accumulate" from "buy" and cutting its
price target to 14,000 francs from <br>15,500 given a
development that it said could well result in a roughly
<br>six-month launch delay. <br><br>The Roche spokesman said an
FDA review panel had raised questions about
<br>clinical trial data for Pegasys, which uses a molecule
developed and <br>produced by U.S.-based Shearwater Corp.
<br><br>"As is expected in these filings and reviews they are
coming up with some <br>additional questions on the
clinical data. This is quite usual for such an
<br>application. We will provide additional information and the
procedure goes <br>on," he said. <br><br>LIBERATING BLOW?
<br><br>The stock market buzzed with speculation Roche would
strike a liberating <br>blow from its current pipeline
woes by making a big acquisition, perhaps <br>of
Germany's Schering AG. <br><br>They cited Roche's $12
billion cash pile that company officials have said <br>it
will not hoard forever but eventually use to bolster
its core <br>businesses. <br><br>"Now Roche is really
under pressure finally to do something," one share
<br>trader said. <br><br>But Roche executives have also said
they will not do a big deal just to <br>spur sluggish
drug sales, and analysts said the jury was still out
on how <br>bad the Pegasys problem was.