Novartis drops two drug candidates, takes $600 million hit

pharmafile | October 6, 2010 | News story | Research and Development Human Genome Sciences, Novartis, candidiasis, hepatitis 

Novartis will incur a charge of nearly $600 million after it halted development of investigational drugs for hepatitis C and invasive candidiasis.

The company said the decision represented an “enhanced focus on portfolio prioritisation and productivity”.

The hepatitis C drug, which Novartis was developing in conjunction with Human Genome Sciences, was dropped because of complete response letters from the FDA and EMA and poor mid-stage trial results.

As a result of this decision the company will take an “intangible asset impairment charge” (i.e. it will write off intellectual property that has become worthless) of around $230 million and will book this in the third quarter.

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The other dropped candidate is the antifungal treatment Mycograb (efungumab), which Novartis was developing for the treatment of invasive candidiasis, a fungal infection in the bloodstream.

Following this Novartis will take another intangible asset impairment and other related charges of around $360 million; this too will be taken in the third quarter. 

The impairment charges will be partially offset by proceeds from the sale of US rights for its overactive bladder treatment Enablex to Warner Chilcott for $400 million, Novartis said.

Ben Adams

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