Novartis Discontinues Two Drug Development Programs

Novartis Discontinues Two Drug Development Programs Swiss pharmaceutical company Novartis (NVS) announced Tuesday that it had discontinued the development of two drugs -- the hepatitis C treatment Zalbin, and the antifungal agent Mycograb -- as part of its ongoing efforts to restructure its portfolio. The changes, Novartis says, reflect "enhanced focus on portfolio prioritization and productivity." The Swiss company also said it will take impairment charges of approximately $590 million in third quarter of 2010 relating to the development of those drugs.

Novartis and its partner, Human Genome Sciences (HGSI), decided to stop further global development of Zalbin (albinterferon alfa-2b) for the treatment of chronic hepatitis C. The reasons, Novartis said, were poor feedback from E.U. and U.S. regulatory authorities, as well as on new data from a Phase II study on monthly dosing.

The Food and Drug Administration sent a complete response letter regarding the application of the 900-mcg Zalbin dosed every two weeks, Human Genome said, without providing more details. Back in June, the FDA had expressed concerns regarding the risk-benefit assessment of Zalbin, and said that approval of the drug was unlikely.

Novartis also discontinued development of Mycograb (efungumab), an antifungal agent that was being assessed for the treatment of invasive candidiasis in adult patients.

The Basel-based company said it will incur charges of approximately $230 million in the third quarter of 2010 related to the Zalbin program and $360 million in relation to the Mycograb program. But Novartis says it expects the charges to be partially offset by gains on its divestment of Enablex to Warner Chilcott for $400 million, of which a gain of approximately $390 million will be recorded in the fourth quarter of 2010.

Novartis has been in the process of restructuring its pipeline since April, acting in anticipation of changes to its product portfolio in the U.S., including the loss of market exclusivity for blockbuster high blood pressure drug Diovan and other medicines over the next few years.

At the time of its April announcement, Novartis said it planned to focus on multiple sclerosis, respiratory diseases and neuroscience to complement its existing oncology business unit. Discontinuing the two drugs, Novartis now says, complements its portfolio streamlining. The company's "strategic focus remains on differentiated products and agents most likely to address unmet patient need," it said.

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