Novartis AG is accelerating development of a new wave of drugs to drive sales growth into the next decade, but the Swiss group also said diabetes pill Galvus missed its goal in matching an older rival.
Both Tasigna, a new cancer drug to follow blockbuster Glivec, and Aclasta, a once-yearly infusion for women with osteoporosis, have been submitted for regulatory approval in the United States and Europe, Novartis said at a research and development day in London on Tuesday.
Aclasta had originally only been planned for filing in 2007. Potential blockbuster Galvus, however, narrowly missed proving it was not inferior to older diabetes drug metformin in a two-year trial, although it was much better tolerated with fewer stomach upsets.
Novartis suffered a setback recently when US approval of Galvus was delayed. Nonetheless, the group is confident of a green light in the first half of 2007 and said the drug would make an ideal combination with metformin.
"Overall it is a net positive, with some drugs submitted earlier than expected. The bears are going to jump on the non-inferiority data, but that was no different from the 52-week data, so it is not really a surprise," said Dresdner Kleinwort analyst Ben Yeoh, who rates the stock a "buy".
Swiss broker Helvea said the failure of Galvus to match metformin in reducing blood sugar levels meant the drug would never reach the $3 billion a year predicted by some analysts. Novartis shares traded down 1.4 percent at 69.70 Swiss francs at 1450 GMT, compared with a 0.5 percent fall for the DJ Stoxx index of European healthcare providers.
Chief Executive Daniel Vasella said he planned to hire around 1,000 extra US sales representatives to promote the new drugs, which would hit pharma margins in 2007, before a likely recovery in 2008. A period of high investment could see margins slip to 28 to 30 percent from 30.7 percent in the first nine months of 2006, he added.
The new products face competition from rivals, with Galvus lagging Merck & Co Inc's similar product, Januvia. James Shannon, head of pharmaceutical development, told reporters Novartis planned to submit a combination of Galvus and metformin to regulators in the first quarter of 2007.
It also aims to combine Tekturna with existing top seller Diovan, following new data showing a significant additional reduction in blood pressure compared to Diovan alone. Combination therapy is increasingly common for many chronic diseases. Exforge is a combination of Diovan and an older blood pressure medicine.
Analysts at Swiss bank Vontobel said the combination data on Tekturna and Diovan were particularly encouraging and provided upside to long-term forecasts. Novartis also said its H5N1 pre-pandemic flu vaccine had been filed for approval in the European Union after good Phase II trial results.