One of America's biggest drug companies saw its shares plunge on Tuesday as concerns grew about the safety of a profitable hormone replacement treatment.

Early results from a major clinical trial in the US indicate that long term use of one type of Hormone Replacement Treatment - Wyeth's Prempro - can seriously damage women's health.

The study found that women using Prempro are at increased risk of stroke, heart attack and breast cancer.

Wyeth - formerly American Home Products - saw its biggest share drop in years when its shares fell 20% or $11.94 to $37.30. Shares of Novavax - another maker of hormone therapies - also fell sharply.

Tuesday's news is the latest blow to the drugs sector. On Monday, it emerged that a subsidiary of the US drugs maker Merck had recorded $12.4bn (�8.4bn) in revenue which was never collected.

"Wyeth is the tragedy today, and who knows what's next," said Cummins Catherwood, who helps oversee $750 million for Walnut Asset Management in Philadelphia.

Overdone?

Hormone replacement products count for about $2bn of Wyeth's sales, about 15% of the company's total sales.

Some analysts argue that as Prempro itself only accounts for a small part of the company's earnings, the market is overreacting to the news.

"The market reaction is overdone," Mark Hesse-Withbroe, an analyst at Victory Capital Management said. His company holds shares in the company and is considering buying more.

"To assume the whole franchise disappears is crazy," he added.

Others say sales of the product could drop by as much as $250m.

The research is expected to be published in next week's Journal of the American Medical Association.

What happens then is up to the US Food and Drug Administration. It may recommend that the company change its advertising or change the information on the package.

It is further bad news for Wyeth, which changed its name in March. Previously, it reached a $3.75bn lawsuit settlement, following claims its fen-phen diet drugs injured users.

Wyeth - based in Madison, New Jersey - also makes Advil pain reliever and Robitussin cough syrup.