UPDATE 1-Novartis says its MS therapy reduces relapses

* On track for planned submission for approval

* No new safety issues in study

* Shares rise 1.8 percent, outperform peers

(Adds conference call, analyst, shares, background)

ZURICH, Sept 30 (Reuters) - Swiss drugmaker Novartis AG NOVN.VX said on Wednesday its FTY720 oral drug to treat multiple sclerosis reduced both relapses and disability progression.

Novartis’s head of global development, Trevor Mundel, told reporters the group was on track to submit the drug for approval in the United States and Europe in December.

Mundel also said the study had not shown signs of new safety issues, which have been a concern with the drug.

Novartis shares were up 1.8 percent to 52.20 Swiss francs by 0746 GMT, outperforming a 0.7 percent rise in the DJ European pharmaceuticals sector index..SXDP

“The efficacy data published this morning confirm that FTY720 is superior to the current interferon-based gold standard of treatment,” Vontobel analyst Andrew Weiss said in a note to clients.

“Given that the higher dose does not seem to add much benefit, it seems viable that Novartis will be filing only for application with the lower dose 0.5 mg,” he said. “This is potentially good news as the safety profile is more benign at the lower dose,” he said.


FTY720 has been associated with potentially fatal infections, skin cancer and a case of haemorrhaging focal encephalitis, an inflammation of the brain with bleeding. It is unclear whether the drug was responsible for the events. [nLT73514]

Novartis and German Merck KGaA MRCG.DE are leading the charge to develop MS drugs that can be taken orally, rather than by infusion or injection, but they must persuade physicians and investors the treatments are safe. [ID:nN24419113]

Novartis said initial results from the two-year Phase III study showed oral FTY720 was significantly superior to placebo in reducing both relapses and disability progression in patients with relapsing-remitting multiple sclerosis, one of the main causes of neurological disability in young adults.

Comprehensive analyses of the data were ongoing, and detailed results are planned to be presented at a leading scientific congress in 2010, Novartis said. (Reporting by Sven Egenter; Editing by Dan Lalor)