Novartis's painkiller Prexige rejected in U.S
ZURICH (Reuters) - U.S. regulators have not approved Novartis AG's Prexige painkiller, the Swiss drugmaker said on Thursday, a move that had been expected after Australia withdrew the drug on concerns over liver side-effects.
"Novartis has received a 'not approvable' letter from the U.S. Food and Drug Administration," the company said.
"Novartis (will) continue discussions with (the) FDA and believes Prexige a valuable treatment option for appropriate patients with osteoarthritic pain," it added.
Shares in the group were unchanged at 64.40 Swiss francs in early trade.
Novartis has in the past touted Prexige as a potential blockbuster, with hopes for sales of over $1 billion a year, but Chairman and CEO Daniel Vasella said earlier this month Prexige was unlikely to gain U.S. approval due to the liver issue.
Many analysts had also doubted the drug, a so-called COX-2 inhibitor, would get on the market in the United States after the Australian regulators' decision last month to withdraw it.
Vontobel analyst Karl Heinz Koch said the decision could prompt Novartis to cut 1,000 sales representatives in the U.S., which would boost profitability.
"The profit margin in the United States is likely to rise as the cost-intensive launch of Prexige is falling away," he said.
Australia's drugs watchdog had received eight reports of serious liver side-effects associated with the use of the drug, including two deaths and two liver transplants.
Prexige, which had modest sales of $52 million in the first half of the year, is approved in more than 50 countries, and is currently being rolled out in Europe.
Last month, Novartis informed doctors in Europe of new restrictions on prescribing Prexige, saying it should not be used in patients with current liver disease or those at risk because of their histories or other medicines.
Nonetheless, Novartis argues its product is no more risky than other older non-steroidal anti-inflammatory drugs (NSAIDs), and the number of patients -- 0.85 percent -- with raised liver enzymes greater than three times the upper limit of normal is in line with other NSAIDs.
At the same time, tests have shown Prexige has significantly less impact on blood pressure.
COX-2s have been under a cloud since the withdrawal of Merck & Co Inc's Vioxx in 2004 after studies found it raised heart attack risks.
Novartis has suffered a series of setbacks this year, tarnishing what should have been a bumper year for the launch of new blockbusters.
Another key new drug, Galvus for diabetes, was also delayed in the U.S. because of safety concerns. The product is expected to be launched in Europe by the fourth quarter of this year, but will only be resubmitted in the U.S. in 2009.
Novartis was also forced to cut its 2007 guidance after withdrawing the bowel drug Zelnorm from U.S. shelves in March.
(Additional reporting by Douwe Miedema and Sven Egenter, with Ben Hirschler in London)
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