Novartis Drug Approval Delayed - Analyst Blog

Novartis AG (NVS) recently announced that the US Food and Drug Administration (FDA) has extended the review period of its pipeline candidate QAB149 for the treatment of chronic obstructive pulmonary disease (COPD).

The FDA will pass its decision on the candidate in July 2011, a three-month delay from the original expectation of April 2011. The FDA needs more time to review the large amount of data submitted as a part of the New Drug Application (NDA) for QAB149. The FDA has, however, not asked for additional data.

We note that earlier in the month, an advisory panel of the US regulatory body recommended the approval of the candidate at 75 mcg dosage by a 13-4 majority. However, the committee voted (12-5) against approving the candidate at the 150 mcg dosage. The decision against the 150 mcg version was based on the panel's belief that treatment with the150 mcg dosage does not result in any additional benefit. Both the doses, were, however, considered to be safe.

The advisory committee reviewed data from five phase III trials, which demonstrated that QAB149, at 75 and 150 mcg doses, significantly improved lung function versus placebo, which lasted for 24 hours.

QAB149 is already marketed as Onbrez Breezhaler in more than 50 countries all over the world. It is available in 150 and 300 mcg doses. QAB149 will be marketed as Arcapta Neohaler in the US, if approved.

Chronic obstructive pulmonary disease afflicts roughly 12 million Americans. A life threatening, progressive lung disease, COPD makes it difficult for patients to breathe and is the third leading cause of death in the US.

Our Recommendation

Currently, we have a Neutral recommendation on Novartis, which is supported by a Zacks #3 Rank (short term “hold” rating). We are pleased with Novartis' wide range of products and its efforts to diversify further as is evident by the acquisition of a majority stake in Alcon (ACL). Novartis is looking to acquire the remaining stake in the eye-care company.  However, we prefer to remain on the sidelines due to the imminent patent cliff faced by Novartis.