European regulators hand Novartis a big setback on a top blockbuster prospect

European regulators handed Novartis a major setback in its quest to gain an approval for serelaxin, one of the pharma giant's top blockbuster prospects which earned "breakthrough" status at the FDA. The European Medicines Agency's Committee for Medicinal Products for Human Use rejected Novartis' application, calling out the development team for failing to demonstrate quick relief for heart disease in the first 24 hours, failing to demonstrate the significance of the benefit over 5 days and calling into question the data that were presented.

The CHMP's recommendations are generally followed by the European Commission when it makes the final decision on marketing. Now if Novartis ($NVS) wants to win an approval in Europe, it will likely have to present data from another study, derailing the company's marketing timetable. The stinging rejection in Europe could spell trouble in the U.S. as well, where the FDA has the drug under review.

Novartis is known for aggressive trial execution for a large slate of pipeline projects but typically does a poor job communicating with investors and reporters--particularly when the news is bad. Today, though, with a top drug hopeful in peril after a critical review, the pharma giant was in top form, putting R&D execs on the phone with analysts to outline Plan B: Shooting for conditional OK in Europe in the second quarter and then leveraging new data for a full approval, when it could expect to ramp up sales in line with expectations.

David Epstein, division head, Novartis Pharmaceuticals

"We would expect sales to be modest initially, but then really take off after the second clinical trial proves its mortality benefit," noted Novartis' pharma chief David Epstein, according to a report from Reuters.

In late 2012 the pharma giant cited serelaxin as Exhibit A in making the case to investors that it has the late-stage drugs that will be needed to arrest a slide in sales revenue. The drug--a synthetic version of the hormone relaxin that aids pregnant women--helped improve shortness of breath among patients over 5 days. But the drug missed other endpoints, raising fears among analysts that an approval this year could simply set up a more critical review process among payers.

That's particularly bleak news for a drug that was expected to play a material role in filling the gaps that will be left when Diovan and Gleevec lose patent protection. Several analysts had estimated peak sales at more than $1 billion. But not everyone was sold on the data.

"This is only a modest negative in our view," wrote Bernstein's Tim Anderson. "While Novartis management has been bullish on the drug's prospects, investors have generally taken a more cautious view because the data seemed mixed. Novartis continues to describe the drug as showing a clear mortality benefit, but independent heart failure experts have been more lukewarm because the mortality benefit described was not part of the primary or secondary endpoints."

The EMA's Committee for Medicinal Products for Human Use was blunt in its assessment:

"The Committee noted that the study results did not demonstrate a benefit for short-term relief of dyspnea over up to 24 hours, and although some benefit was shown over 5 days it was not clear how this was of clinical relevance. Furthermore, the Committee had concerns about the way the effectiveness of the medicine in the study had been analyzed. The results included calculated values for a number of patients who had died or had required additional treatment for worsening symptoms and whose actual data were not used. In addition, the CHMP questioned whether differences in the background treatment given to patients in the two study groups may have influenced the results. Since only one main study was included in the application, further studies would be needed to confirm the effectiveness of Reasanz (serelaxin) in the treatment of acute heart failure."

- here's the release from Novartis
- see the committee's assessment (PDF)
- read the Reuters report

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