Swiss pharmaceutical company Novartis AG (NVS) Tuesday said it has received regulatory approval in Switzerland for its eye drug Lucentis for the treatment of age-related macular degeneration.
Novartis, based in Basel, said this marks the first European approval of the drug. Novartis owns the right to sell the drug in Europe. In the U.S., Lucentis is sold by Genentech Inc. (DNA), which developed the medicine.
Approval in the European Union is expected for the first half of 2007.
"The E.U. approval is much more important," said Denise Anderson, analyst in Zurich with Kepler Equities, who has a reduce rating on Novartis. Once Novartis has received permission to sell the drug, the roll-out of the drug in all member states could take another year, she said.
Anderson estimates that the drug will generate revenue of $575 million in 2009.
However, Swiss approval is important because many countries that don't have their own regulatory approval process for new medicines allow a drug to be sold once it has received approval from the country where the company is based.
Lucentis received Food and Drug Administration approval on June 30. The drug is similar to Genentech's cancer drug Avastin in that it blocks a protein that makes blood vessels grow.
However, Lucentis was developed specifically for use in the eye and demand for the drug has been pent up because it was shown to improve vision in patients with age-related macular degeneration, or AMD, in clinical trials. AMD is a leading cause for blindness in people over the age of 50.
Analysts said they expect the drug to eventually become a blockbuster, with annual sales of at least $1 billion, for each company.
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