Shire led London’s blue-chip fallers after a regulatory setback cooled recent bid speculation.

News overnight that Shire had unexpectedly pulled a US regulatory filing for Replagal, its treatment for a rare enzyme deficiency known as Fabry Disease, gave the shares their biggest loss in more than five months.

Since 2009, Shire had supplied Replagal to US patients for free in response to manufacturing problems at Genzyme, which produced the only direct competitor. However, the US regulator indicated that, to gain approval to sell Replagal, it would need to run additional studies.

Shire had little incentive to fund the extra tests as production at Genzyme, now owned by Sanofi-Aventis, would return to normal later this year, analysts said.

The impact to consensus forecasts was negligible. Barclays Capital estimated that the US setback would cost Shire between $30m and $40m in sales compared with group annual revenues or around $5bn. But with Shire shares having been lifted by takeover hopes since the start of the year, the setback provided a trigger to take profit. The stock closed weaker by 3.1 per cent to £21.58.

The wider market struggled for direction, leaving the FTSE 100 down 4.71 points at 5,940.72.

Better than expected February sales figures from H&M helped lift the retailers with Next taking on 2.6 per cent to £29.01 and Marks and Spencer ahead 1.2 per cent to 375p.

UBS recommended buying Next ahead of its full-year results next Thursday.

Earnings growth of more than 20 per cent at Next’s Directories business should eclipse falling retail profit and an outlook statement that was likely to be unchanged from January, UBS argued.

Whitbread drifted 0.5 per cent to £17.10 after Investec Securities began coverage of the Premier Inn and Costa Coffee owner with a “sell” recommendation.

“We believe the Whitbread bull case is running out of steam,” said analyst James Hollins. “We predict that each of the group’s drivers of growth and sources of subsequent share strength are facing challenges in the short and medium-term with limited product and concept innovation that has driven group performance in recent years.”

A warning on 2012 sales sent Domino Printing Sciences tumbling 15.5 per cent to 560½p with the group reporting that the European market had remained tough while China and the Middle East had deteriorated.

“Domino Printing has traditionally been viewed in the sector as an early cycle indicator” for the capital goods makers, said BarCap.

Renishaw faded 6.1 per cent to £13.96, Spectris was down 2.4 per cent to £17.79 and Halma eased 1.4 per cent to 401¾p.

Van rental specialist Northgate dropped 7.4 per cent to 220½p after warning that weakness in the UK and Spain would mean its 2012 earnings would be at the lower end of market expectations.

F&C Asset Management was down 6.6 per cent to 68¼p after confirming that it expected Friends Life, one of its long-term customers, to withdraw all assets at contract expiry in 2014.

Friends Life has £27.5bn of assets managed by F&C, equivalent to 27 per cent of the group’s total assets under management.

Bookmaker BWin Party Digital lost 5 per cent to 153p following a downgrade to “underperform” from Macquarie.

“Peer results showed that the Mediterranean European economies were showing the impact of austerity measures with Greek and Spanish revenues down significantly,” Macquarie said. “With 20 per cent of BWin’s revenues coming from these challenged economies, we believe consensus revenue estimates are overstated.”

Logica took on 5.6 per cent to 102p, a strength some traders said was on renewed speculation that the IT services group could be a takeover target.

Others suggested that the stock had been helped by a milder than feared outlook statement from Temenos, the Swiss maker of banking software.

Regus, the serviced office provider, gained 4 per cent to 116½p on an upgrade to “buy” from Oriel Securities.

Among small caps, Game Group bounced a further 64.3 per cent to 3.45p on survival hopes.

The troubled video games retailer said late on Wednesday that a company, known to be private equity group OpCapita , had made an offer to buy out its debt.

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