One of the most fancied drugs in the drug industry pipeline – Novartis’ diabetes treatment Galvus – is facing a delay en route to market in the USA after the company submitted additional information to the Food and Drug Administration.

Novartis has filed new data showing that reactions affecting the skin, which were seen in preclinical studies of Galvus (vildagliptin), have not been seen in human tests of the drug.

The delay will hold back the FDA review deadline for the drug by three months, with the agency now committed to delivering a verdict on the application by the end of February 2007.

The delay comes at a critical time as Novartis has been racing to reach the market as soon as possible to avoid getting left behind by Merck & Co, whose rival drug Januvia (sitagliptin) was approved in the USA last month.

Both drugs are members of the new dipeptidyl peptidase (DPP)-4 inhibitor class, which have been tipped by analysts at Morgan Stanley to become multibillion dollar-selling drugs, with sales in the USA alone of around $3 billion a year, because they do not cause the weight gain seen with other orally-active drugs for diabetes.

Merck had been hoping to get as long a lead as possible over Galvus in order to capture as many eligible patients for the new treatments as possible.

A three-month delay would not be a disaster for Novartis, but shares in the company fell as investors absorbed news of a possible side effect that had not been made public before now.

Novartis was down 1.3% on the Zurich stock exchange at 72.75 Swiss francs in mid-morning trading.

We are confident of the efficacy and safety of Galvus and in gaining US approval," said James Shannon, head of development at Novartis Pharma. "We believe this additional information being provided to the FDA will strengthen the already robust data supporting Galvus as a new and needed treatment option for patients with type 2 diabetes."