Novartis separately drops development of antifungal drug Mycograb.

Novartis and Human Genome Sciences (HGS) have canned further development of their registrational chronic hepatitis C (HCV) candidate Zalbin™/Joulferon® (albinterferon alfa-2b) as a result of a complete response letter from FDA together with prior feedback from the European Medicines Agency (EMEA) and data from a new Phase II trial. Novartis says it is also discontinuing development of the antifungal agent Mycograb (efungumab), which had been in development for the treatment of invasive candidiasis in adults. In its July second quarter 2010 results presentation, Novartis had projected filing Mycograb for approval in 2013.

The future for Zalbin/Joulferon has not looked very promising for months. In June HGS reported briefly on FDA’s preliminary feedback on the BLA for Zalbin, which had been submitted in 2009. The BLA related to a 900 mcg dosing of Zalbin every two weeks for the treatment of chronic HCV. Preliminary FDA feedback on the BLA in June this year expressed the agency’s concerns regarding the risk-benefit assessment, and as a result HGS admitted that although the BLA review would continue, “licensure of this dosing regimen is unlikely.” Novartis, meanwhile, had already withdrawn its Joulferon application to the European regulatory authorities in April as a result of preliminary feedback from the EMEA. This feedback also cited the risk-benefit evaluation as an issue and indicated that new data would be required, which Novartis admitted could not be generated within the timeframe allowed in the European Centralized Procedure.

HGS and Novartis had been developing Zalbin/Joulferon under an exclusive worldwide co-development and commercialization agreement signed in 2006. The drug is a genetic fusion of human albumin and interferon alfa, generated using HGS’ albumin-fusion technology. Novartis says the decision to stop development of the drug will result in an intangible asset-impairment charge of $230 million in the third quarter of 2010.

The firm’s separate decision to stop development of Mycograb will result in an intangible asset-impairment and other related charges of $360 million in the third quarter of 2010. The two impairment charges are expected to be partially offset through the proceeds Novartis will receive from the recent $400 million sale to Warner Chilcott of U.S. rights to the marketed overactive bladder drug, Enablex®.

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