Novartis Pulls Zelnorm in U.S., Cuts 2007 Outlook
Novartis pulled bowel drug Zelnorm from U.S. shelves on Friday at the request of regulators because clinical trial data indicated a possible link to heart attacks and strokes.
The move is a body blow to the drug, a treatment for irritable bowel syndrome which previously had run into safety issues and never been approved for use in Europe, and it prompted Novartis to cut its 2007 sales forecast.
The Swiss drugmaker said the U.S. Food and Drug Administration had asked it to suspend marketing and sales to permit further discussion of benefits and risks of the medicine.
FDA officials said Zelnorm might be able to return on a limited basis but only if a group of patients could be identified for whom the benefits outweighed the risks.
Zelnorm was Novartis's 12th-biggest selling drug in 2006, with global turnover growing 30% to $561 million, of which $488 million was generated in the United States.
About 500,000 U.S. patients are taking Zelnorm, Novartis spokeswoman Anna Frable said.
Novartis shares fell $2.26, or nearly 4%, to close at $54.63 on the New York Stock Exchange.
"This news is obviously quite a surprise, involving a medium-size product for Novartis that was expected to have annual sales of $1 billion by 2012," said Shaojing Tong, an analyst with Mehta Partners in New York.
"Although it's a setback, I don't think it will hurt Novartis to a great extent because overall it is a fairly solid company," he added.
Prudential Equity analyst Tim Anderson said Zelnorm's loss could lop around 2% off 2007 earnings per share. There was also a risk of product liability lawsuits, although this would be largely immaterial to a company of Novartis' size, he said.
The withdrawal was prompted by an analysis of data on more than 18,000 patients. It found the incidence of serious and life-threatening cardiovascular problems in those on Zelnorm was 0.11% against 0.01% for those given a placebo, Novartis said.
The FDA said one of the 13 affected patients in the Zelnorm group had died. Of those taking placebo, only one had symptoms suggesting the beginning of a stroke, which went away without complication.
"We have not proven causality," Dr. John Jenkins, director of the FDA's Office of New Drugs, told reporters. But he said the difference between the groups was "very concerning" and enough to warrant the drug's recall.
Novartis told the FDA on February 22 about preliminary findings of cardiovascular problems, Jenkins said. After requesting more data and doing its own review, the FDA asked Novartis to withdraw the drug on March 28.
Zelnorm is the second drug in two days to come off the U.S. market. On Thursday, the FDA said makers of Parkinson's drug pergolide were pulling it because of a risk of heart-valve damage.
Sales Outlook Cut
Novartis lowered its financial targets and said it would make provisions for costs related to the suspension in the first quarter of 2007.
"Novartis has revised its outlook for net sales growth, barring unforeseen events, for the group to above 5%, and for the pharmaceuticals division to a low to
mid-single-digit rate, both in local currencies," it said.
Previously, Novartis had forecast group net sales would rise in 2007 at a mid- to high-single-digit percentage rate and net pharmaceuticals sales at a mid-single-digit rate.
"Novartis is still evaluating the impact on the full-year 2007 operating and net income results from continuing operations," the firm added.
Despite pulling the product, Novartis defended Zelnorm, which it said provided benefits for patients with constipation and irritable bowel syndrome.
Zelnorm, known generically as tegaserod, had a rocky path to its 2002 U.S. approval. The FDA rejected Novartis' initial bid in 2001 and requested more data on abdominal surgery in some patients.
U.S. consumer group Public Citizen had campaigned against the drug's approval.
In 2004, a warning was added to Zelnorm's U.S. packaging about the effects of diarrhoea and the risk of a condition where blood flow to the intestines is reduced.
Zelnorm is marketed in 55 countries, the FDA said.
Novartis said it still had the ability to perform share buybacks despite the forecast for lower results.
GlaxoSmithKline's irritable bowel drug Lotronex came off the U.S. market in 2000 after some patients experienced severe intestinal problems. The FDA allowed Lotronex to return with restrictions in 2002.