UK's NICE rejects Novartis's Xolair for children

* Drug too pricey, shows little extra benefit -NICE

* Follows FDA rejection in November

LONDON, June 1 (Reuters) - Novartis's NOVN.VX asthma drug Xolair will not be paid for by Britain's national health service (NHS) after the National Institute for Clinical Excellence (NICE) cost watchdog rejected it on Tuesday as too expensive.

NICE, which rules on which drugs should be provided for patients on Britain’s taxpayer-funded health system, said Xolair, known generically as omalizumab, provided “little additional benefit over existing drugs for the treatment of severe persistent allergic asthma in most children aged 6-11”.

“Its high cost also means that for the limited benefit it provides, omalizumab does not present value for money for the NHS,” NICE said in a statement.

The decision is a further a blow to efforts by the two drug companies that market the asthma drug to widen its potential patient group to include children. Novartis and Roche's ROG.VX Genentech unit jointly market Xolair in the United States, while Novartis markets it elsewhere.

Xolair, which generated sales of $517 million for Genentech and $211 million for Novartis, was rejected by U.S. drug regulators in November after an advisory panel voiced concern about its long-term safety. [ID:nN18128248]

The drug has been cleared since 2003 for use by adults and adolescents aged 12 and older, and was approved by the European Commission last August as an add-on therapy for children aged six to 11 years with severe persistent allergic asthma. NICE said that although asthma affected 1.1 million children in Britain, only about 300 of them would be eligible to try omalizumab.

Xolair works by disabling a naturally occurring antibody called IgE, which triggers the release of chemicals that cause inflammation and provoke asthma and allergy attacks.

It is given by injection every two or four weeks by a healthcare provider. NICE said that according to the manufacturer’s estimates, the drug costs 256.15 pounds ($374) for a 150 milligram vial, excluding taxes.

NICE chief executive Andrew Dillon noted that clinical trials had shown no proven reduction in hospitalisation rates, accident and emergency visits, symptom-free days and nights, severe exacerbations or health-related quality of life.

“Considering the very limited benefits omalizumab offers in this age group, the price the NHS is being asked to pay for omalizumab is too high,” he said. (Reporting by Kate Kelland, editing by Will Waterman) ($1=.6852 Pound)