By Sten Stovall

Of Dow Jones NEWSWIRES

LONDON -(Dow Jones)- Shire PLC (SHP.LN) Wednesday unexpectedly withdrew its U.S. Food and Drug application for its rare disease drug Replagel, an enzyme replacement therapy for Fabry disease, because the FDA was likely to want more expensive clinical studies done on the medicine.

Shire, which specializes in rare diseases with small patient populations, had filed in November for FDA approval for Replagal in anticipation of a quick review process. But recent interactions with the regulator led Shire to believe that the FDA will require additional controlled trials for approval.

"No concerns over the product's safety profile were raised by the FDA. Shire has concluded that the likely additional studies would cause a significant delay, and an approval of Replagel for U.S. patients would only be possible in the distant future. Shire has therefore decided to withdraw its Biologics License Application," Britain's third-biggest drug maker by sales said.

Shire had been supplying the therapy to the U.S. market due to manufacturing problems in 2009 that lead to short supplies of Fabrazyme, which is made by Genzyme, now owned by Sanofi SA (SNY).

Sanofi said earlier this month that it had begun U.S. deliveries of Fabrazyme from its newly approved manufacturing plant in Framingham, Massachusetts. The French drug maker said a full return to normal supply levels would begin in the second quarter and continue throughout 2012.

The global population of people suffering from Fabry disease is estimated at 6,000, with 4,200 treated. Replagal, which had total sales last year of $475 million, had more than 70% of the market for Fabry disease outside of the U.S., according to Morgan Stanley.

Barclays Capital estimates the unexpected withdrawal of Replagal will cost Shire only around $30 million to $40 million in lost revenues, and sees Shire's Fabry dominance outside the US as unaffected.

"We continue to expect peak sales of more than $700 million, outside the U.S. where Replagal has more than 80% of the market. We don't see today's development as impacting Shire's position negatively, although a reinvigorated Genzyme now has the chance to attack Shire," BarCap said in a note.

Shire, whose shares have been hitting record highs consistently amid high investor enthusiasm, saw its stock fall at Thursday opening and, at 0840 GMT, were 0.7% lower at 2211 pence but up 23% from year-ago levels.

-By Sten Stovall, Dow Jones Newswires; +44 207 842 9292; sten.stovall@dowjones.com