Novartis shares tumble after drug fails to pass muster
Shares in the Basel-based healthcare giant, Novartis, had fallen by more than seven per cent at the end of trading on the Swiss stock exchange to SFr63.1 ($35.35). The fall comes after United States regulators on Monday refused to approve one of the company's new drugs.
The decision by the US Food and Drug Administration (FDA) not to grant marketing approval for Zelnorm, a treatment for irritable bowel syndrome, has fuelled fears that US authorities are taking a more conservative line on drug licensing.
There are reports that unless Novartis can mount a successful appeal against the refusal, Zelnorm will not be launched until late 2003 at the earliest. In May, the drug failed to clear European regulators because of differences found in its effectiveness.
Analysts say that the setback takes the shine off Novartis's improving fortunes, particularly in the US.
The FDA's decision comes after Novartis's Starlix diabetes drug failed to live up to expectations. The company also had problems with Xolair, an injectable allergy drug, whose launch has been delayed.
Reports say that the US Food and Drug Administration has come under pressure from consumer groups and politicians after the withdrawal of several approved drugs because of dangerous side effects.
"This is not about Novartis," said Paulo Costa, head of Novartis's US pharmaceuticals. "In an environment where the FDA is very cautious, delays are inevitable for any pharmaceuticals company."
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