Novartis has pulled the plug on two investigational compounds, including a late-stage chronic hepatitis C treatment partnered with Human Genome Sciences, and will take a $590 million charge.
First up, the Swiss major and HGS are to stop further development of albinterferon alfa-2b, an investigational compound for the treatment of adults with chronic hepatitis C. The firms have just received a complete response letter from the US Food and Drug Administration and say that feedback from European regulators, as well as from those across the pond, plus new data from a Phase II study conducted with the monthly dosing of albinterferon, have prompted the decision.
As a result of that termination, Novartis is taking an intangible asset impairment charge of $230 million will be taken in the third quarter of 2010. It is also halting development on Mycograb (efungumab), an antifungal agent being assessed as an add-on therapy to treat invasive candidiasis, resulting in charges of $360 million.
Novartis noted that these charges will be partially offset by a gain of about $390 million through the sale of the US rights last week for the overactive bladder treatment Enablex (darifenacin) to Warner Chilcott. That will be recognised in the fourth quarter.
The Basel-headquartered group said the move reflects its "enhanced focus on portfolio prioritisation and productivity". The decision has gone down well with analysts who believe the hepatitis C and antifungal markets are already well-catered for.