There's Still Only One

It looks like Novartis (NYSE: NVS  ) will have a few more months of competition-free marketing for its new oral multiple sclerosis drug, Gilenya. The Food and Drug Administration slapped a three-month delay on the next closest drug, Merck KGaA's cladribine.

This isn't the first delay for cladribine. The FDA refused to accept the application last November, asking for additional information before the agency would even look at the application. Merck KGaA resubmitted the application six months ago and was supposed to hear by yesterday whether the FDA was going to approve the drug.

Cladribine has also had trouble in Europe where the European Medicines Agency issued a negative opinion of the drug in September, claiming the risks didn't outweigh the benefits.

The European decision, which Merck KGaA is appealing, led to fear that the FDA would do the same. On the surface, an extension makes it seem like the FDA might be more open to approving the drug, but the delay might just be the thorough nature of the FDA. Rejections are called "complete response letters," and if the FDA hasn't finished reviewing data submitted by Merck KGaA, its response really wouldn't be complete. Even if a rejection is coming, Merck KGaA should be willing to wait so that it knows everything the FDA wants in order to gain approval. It certainly doesn't want to get rejected for one thing only to discover the FDA has a new issue on the second attempt.

Whatever the final decision, Novartis gets at least an additional three months to pump Gilenya. While Gilenya remains free of competition in the oral multiple sclerosis drug market, it still has other competition.

Gilenya has the advantage over drugs available from Bayer, Merck KGaA, Pfizer (NYSE: PFE  ) , Teva Pharmaceutical (Nasdaq: TEVA  ) , Biogen Idec (Nasdaq: BIIB  ) , and Elan (NYSE: ELN  ) , since it can be taken orally while the others have to be injected or infused. But what the others lack in the ouch-factor, they make up for in doctors' experience. Prescriptions for Gilenya may be slow to develop until doctors gain experience with the drug.

We'll know just how well the launch is going when Novartis releases fourth-quarter earnings early next year.

Interested in keeping track of Novartis as it launches Gilenya? Click here to add it to My Watchlist, which will help you keep track of all our Foolish analysis on Novartis.

Pfizer is a Motley Fool Inside Value choice. Elan is a Motley Fool Rule Breakers recommendation. Novartis is a Motley Fool Global Gains pick. The Fool owns shares of Teva Pharmaceutical. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.


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