# Reuters: Novartis, Bristol-Myers pull Zelmac from EU review



## Jeffrey Roberts (Apr 15, 1987)

http://biz.yahoo.com/rf/010531/l31156504_2.html Thursday May 31, 12:04 pm Eastern TimeNovartis, Bristol-Myers pull Zelmac from EU review(UPDATE: Adds comments from Novartis development head, market reaction, byline, changes dateline pvs BASEL)By Michael ShieldsZURICH, May 31 (Reuters) - Novartis AG suffered a rare setback in its product development pipeline on Thursday when it pulled a potential blockbuster drug from a European Union regulatory review amid disagreement over clinical results.The Swiss health care group said it made the unusual move after it became clear an EU advisory panel was not going to approve Zelmac for treating irritable bowel syndrome (IBS). It is one of five key products it planned to launch this year.Novartis, however, stuck to its forecast that group drug sales growth would match the industry average this year and beat it next year even though a European rollout of Zelmac now seemed unlikely before 2003. Zelmac's U.S. launch was still on track, it said.Novartis shares closed 4.6 percent lower at 68.25 Swiss francs on the news. U.S.-based Bristol-Myers Squibb (NYSE:BMY - news) is its ally to co-develop and market the drug.``This decision resulted from a difference of opinion with the Committee for Proprietary Medicinal Products regarding the relevance of the observed clinical effect. There was also disagreement over the methodological conduct of some pre-clinical studies,'' Novartis said in a statement.Joerg Reinhardt, global head of pharmaceutical development, told Reuters the group's current forecast of matching the sector's average growth this year was ``absolutely'' still valid.``And for 2002, I think we would still maintain the expectations that we will grow above the industry average,'' he said. He did not discuss prospects for 2003, for which Novartis has also forecast above-average drug sales growth rates.Reinhardt said Novartis was likely to submit more trial data to back a new EU application for Zelmac, but that this would take time.``In the EU it could take us until the end of next year to go back. If we really run an additional programme with at least one major new trial it will certainly take that time. I would currently hope we would be able to go back before the end of next year with new data,'' he said.But that meant an EU launch was ``unlikely before 2003''.He was confident the drug would ultimately win approval for treating IBS, a chronic disorder that can cause abdominal pain, bloating and constipation.IBS is estimated to affect up to one person in five and trails only the common cold as the most frequent reason why people miss work because of illness.``We are really committed to bring it to the market in Europe,'' Reinhardt said.He said the U.S. approval process for Zelmac was not affected and added that other late-stage products in Novartis's pipeline were all moving ahead according to schedule.Analyst Denise Anderson at Bank Julius Baer said the setback was bad news but not devastating because the European market for Zelmac was likely to contribute only about 20 to 25 percent of overall sales of the drug.The drug was also in trials for other conditions such as chronic constipation, and could be on the market for these illnesses by 2003, she noted.``Clearly the (market) reaction was overdone. What we're telling clients is use the opportunity to buy again because when you look at the impact on (earnings) you could argue it is positive for the near term because now they don't have marketing costs for the drug in Europe,'' she said. Copyright ï¿½ 2001 Reuters Limited.


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