Novartis AG (NVS) Friday experienced its second setback in less then a week, when the advisory panel of the European Union's drug regulator advised against approval of the Swiss pharmaceutical company's antifungal medicine Mycograb.
On Monday, Novartis had said that the U.S. Food and Drug Administration will take three months longer than anticipated to decide on approval for diabetes drug Galvus, because it is reviewing data on the safety and dosing of the drug that the company submitted only recently. Analysts still expect the potential multibillion dollar drug to gain approval, but the delay means its falling further behind Januvia, a rival treatment, for which its maker Merck Co. (MRK) has already gained the regulator's ok.
Now, the FDA's European counterpart said that its expert panel, the Committee for Medicinal Products for Human Use, or CHMP, was concerned about the quality and safety of Mycograb, an antifungal drug.
Novartis plans to submit additional data to the E.U. to support the approval of Mycograb, which is in development as a treatment for life-threatening fungal infections.
This submission for E.U. approval was made last year by NeuTec Pharma, a British pharmaceutical company that Novartis acquired in mid-2006 to expand its portfolio of compounds for hospital-acquired fungal and bacterial infections. The E.U. panel said data relating to the manufacturing and characterization of the product was insufficient to determine the safety of the compound.
Mycograb, is an antibody, which could generate annual revenue of $300 million, if approved, according to analysts' estimates. It is a so-called add-on treatment, which aims to improve the effectiveness of existing drugs.
Novartis said it is committed to working with the CHMP to determine appropriate next steps.
At 1650 GMT, Novartis was down CHF0.15, or 0.2%, at CHF72.35, in a lower broader market.
On a brighter note, the European Medicines Agency issued positive opinions on Novartis' eye drug Lucentis and hypertension medicine Exforge. Both drugs have the potential to become blockbusters with annual sales of $1 billion or more, analysts say. The European Commission usually follows these recommendations, and typically grants formal approval within 90 days.
Lucentis, or ranibizumab, has been shown to maintain or improves vision in patients with age-related macular degeneration, a form of bleeding behind the retina and the leading cause of blindness in elderly people.
Lucentis is approved in Switzerland and the U.S. for treatment of wet AMD.
AMD is an eye disease characterized by abnormal, leaky blood vessels that form under the retina, the light-sensing part of the eye. The vessels leak fluid into the eye, damaging the macula, the central part of the retina at the back of the eye. The macula is responsible for the straight-ahead vision necessary for everyday activities like reading, driving, watching television and identifying faces.
Lucentis is the first drug ever that has been shown to improve vision in people suffering from wet-form AMD.
The drug was developed by Novartis and Genentech Inc. (DNA), which is selling Lucentis in the United States. Novartis owns the marketing rights for the rest of the world.
The E.U. experts also recommended to approve Exforge, a pill that combines two different types of hypertension treatments.
Exforge combines Novartis' top-selling Diovan and amlodipine, a drug that lowers blood pressure in a different way, in a single pill. Amlodipine is the active ingredient in Pfizer Inc's (PFE) Norvasc, which will lose patent protection in September 2007.
Some analysts say the main advantage of Exforge to Novartis is that it will help protect Diovan sales when the bestseller loses patent protection in 2012. Peak sales estimates for Exforge start at around $500 million, though some analysts expect the drug to eventually generate annual sales of $1 billion or more.
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