* Company says FTY720 beats efficacy of current top drug
* One new patient death reported
* Serious side effects in less than 2 pct of patients
* Race on to develop safe oral MS drug
(Adds more analyst comment)
By Emma Thomasson
ZURICH, April 29 (Reuters) - Novartis AG NOVN.VX said 80-83 percent of those taking its multiple sclerosis drug FTY720 are relapse-free compared with 69 percent on the leading current treatment, but it reported a new patient death.
Novartis said the patient died from aspiration pneumonia related to a progressive neurological condition.
Safety concerns have surrounded the drug for some time.
FTY720, has been associated with potentially fatal infections, skin cancer and a case of hemorrhaging focal encephalitis, an inflammation of the brain with bleeding. It is unclear whether the drug was responsible for the events.
Novartis, which is presenting new Phase III results to the American Academy of Neurology, said the data reinforced results announced in December that showed the annual relapse rate was 52 percent lower compared with patients taking Biogen’s (BIIB.O) injectable multiple sclerosis drug Avonex.
Novartis AG and Germany’s Merck KGaA (MRCG.DE) are leading the charge to develop MS drugs that can be taken orally, rather than by infusion or injection, but the firms must persuade physicians and investors that the treatments are safe. [ID:nN24419113]
Novartis said serious adverse effects were reported in less than 2 percent of patients treated with FTY720 and said a role for the drug in the death of a patient in February who stopped taking FTY720 in August could not be confirmed or ruled out.
Sal. Oppenheim analysts said the news of the death was the main news in the report and said it was slightly negative.
“This and other reported serious events in the FTY720 arm significantly increase regulatory risks in our view,” they said.
Helvea analyst Karl-Heinz Koch said he was not too concerned, noting the long lapse between the time the patient stopped taking the drug and the death.
“We continue to believe that the safety-efficacy ratio remains positive and that the drug will find its way into the marketplace,” he said, predicting sales of $1.5 billion for FTY720 and a follow-on treatment.
Novartis shares were flat at 1230 GMT, in line with the DJ Stoxx European healthcare index .SXDP.
Novartis said full results from the so-called TRANSFORMS study would be submitted to a peer-reviewed journal in the next few months, adding regulatory filings were on track for the United States and European Union at the end of 2009.
Lead investigator Jeffrey Cohen said the trial showed that FTY720 “may provide patients with an alternative choice to currently available medications for treating relapsing-remitting multiple sclerosis”.
Novartis also presented longer-term results from a Phase II study that showed continued low relapse rates after four years of treatment, with no change in the safety profile.
It added that the safety profile of a 0.5 mg dose appeared to be better than the 1.25 mg dose.
Merck’s drug, cladribine, has been linked to a reduction in white blood cells, which can lead to infection, and in January the company said four patients in a late-stage trial were diagnosed with cancer. It is also due to present study results at the neurology meeting in Seattle.
Earlier this year Merck said results of a late-stage trial showed cladribine reduced the number of relapses per year by as much as 58 percent, compared with those taking a placebo.
Biogen is developing an oral MS drug, known as BG-12, but it is not as far advanced as the Merck or Novartis drugs.
Editing by John Stonestreet and David Cowell