Biotech Values

[DewDiligence]

Two Up, One Down for NVS in EU

[Exforge is a combination of Diovan and Norvasc that NVS will market as soon as PFE’s patent on Norvasc expires.]

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20061117:MTFH43617_2...

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Fri Nov 17, 2006 10:37 AM ET
By Ben Hirschler

LONDON, Nov 17 (Reuters) - A panel of European experts has recommended against approving Novartis AG's <NVS> antifungal drug Mycograb, which the Swiss group acquired with the purchase of British biotech firm NeuTec Pharma in June.

The London-based European Medicines Agency said on Friday the Committee for Medicinal Products for Human Use (CHMP) was concerned about the quality and safety of the medicine.

But there was also good news for Novartis, with its Exforge two-in-one hypertension drug and Lucentis treatment for blindness, which is marketed by Genentech Inc <DNA> in the United States, both recommended for marketing clearance.

CHMP recommendations are normally endorsed by the European Commission within a couple of months. However, Novartis does not intend to make Exforge available in Europe until April 2007 [because they have to wait for PFE’s Norvasc to go off-patent].

Novartis said it would provide clarification to regulators to support the approval of Mycograb, noting the negative opinion was not linked to its efficacy but rather issues over manufacturing.

Novartis spent 305 million pounds ($575 million) to acquire NeuTec, with Mycograb, a novel genetically recombinant antibody for the treatment of infections, seen as the prize asset.

Ben Yeoh, pharmaceuticals analyst at Dresdner Kleinwort, said the news was disappointing but noted Novartis had bought NeuTec for its underlying technology as well as this drug.

"It was NeuTec that made the submission to EMEA (European Medicines Agency) and the tendency of small biotechs is not to cover all bases as thoroughly as the big pharmaceutical companies," he added.

Andrew Fellows of stockbroker Helvea agreed the Mycograb rejection was a blow but said it was balanced by the positive news on Exforge and Lucentis, both of which were important future growth drivers.

Novartis shares were 0.3 percent higher at 72.70 Swiss francs by 1510 GMT.
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