Novartis says that it is ending development of the antibacterial Aurograb after it failed to show efficacy in mid-stage trials.

The lack of efficacy was revealed following a review of a Phase II study of Aurograb, an add-on therapy to antibiotics that was being assessed for use in treating deep-seated staphylococcal infections. Novartis got hold of the drug when it acquired the UK’s NeuTec Pharma in July 2006 for $570 million.

As a result of terminating work on Aurograb, a human-derived single chain variable fragment therapeutic antibody, the Swiss major said that it will take an impairment charge of around $235 million, which reflects the full amount it has allocated to studies on the therapy. The charge will be taken in the third quarter.

However Novartis noted that the other key compound acquired through the NeuTec purchase, Mycograb (efungumab), is progressing well. It said Phase III trials and submission preparations continue for the drug which is being assessed as an add-on therapy to other antifungal agents in treating invasive candidiasis and other severe fungal infections.

The termination of Aurograb comes a couple of days after Novartis said it would not submit a New Drug Application in the USA for NM100060, a topical nail fungus product being developed by partner NexMed. The Swiss firm's decision to pull the NDA was based on negative Phase III study results for the product, which is a reformulation of Lamisil (terbinafine) and the move led to an 80% collapse in NexMed’s share price.