ZURICH (Dow Jones)--Novartis AG (NVS) said Wednesday new study results showed its experimental multiple sclerosis pill FTY720 worked better than a rival drug, but also reported the death of a patient who had taken the drug, highlighting concerns about the drug's safety profile.

Novartis, based in Basel, said results from a new late-stage study showed that 80% to 83% of patients taking FTY720 remained free of relapses during the one-year study - compared to 69% of those who took Avonex. Biogen Idec's (BIIB) Avonex is the best-selling treatment for the disease.

Analysts have in the past expressed concerns over the general safety of FTY720, in particular about the seven cases of skin cancer compared to only one on Avonex. Many have therefore lowered their estimates of the drug's potential.

Such concerns were reinforced through Wednesday's press release, where Novartis reported that a patient who had discontinued FTY720 died a few months later from pneumonia related to a progressive neurological disease.

"A role for FTY720 could neither be confirmed nor excluded," Novartis said in a statement.
But the finding increases the risk that the drug, one of Novartis' most important new drugs in development, may not pass regulator's scrutiny. The company reiterated that it plans to file the MS pill for regulatory approval in Europe and the U.S. at the end of 2009. "What's troubling about today's announcement is that surrounding the good news is the report of a new neurological death, which occurred in February this year," said Carri Duncan, pharmaceutical analyst in Zurich with Swiss private bank Sal. Oppenheim, who has a neutral rating on the stock.
"We believe if such serious events prove to be linked to FTY720 treatment, it could have a deleterious [bad] effect on the regulatory assessment of the drug later this year," she added.
Multiple sclerosis, or MS, is a chronic disease for which no cure is available, and patients usually require lifelong treatment once diagnosed. Symptoms range from blurred vision to partial or complete paralysis. In its most common form, called relapsing-remitting MS, patients suffer acute attacks - called relapses - of neurological dysfunction followed by complete or incomplete remission in function.

The data was presented at the American Academy of Neurology congress in Seattle, WA.
At 0815 GMT, Novartis shares were up CHF0.32, or 0.8%, at CHF42.80. They have fallen around fallen 19% year-to-date and underperformed the European healthcare sector at large, which is down 10% so far in 2009.
Article in the Wall Street Journal

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