Novartis plans $235M charge after dropping drug

Swiss pharmaceutical company Novartis AG said Friday it would take a $235 million impairment charge in the next quarter after deciding to drop its development of a new antibiotic drug.

Novartis said in a statement that it made the decision not to pursue further trials of "Aurograb" after Phase II clinical test results showed its "lack of efficacy as an add-on therapy for life-threatening bacterial infections."

The company gained the right to the compound in 2006. It said the impairment charge reflects the full amount allocated to the project and would be taken in the third quarter.

Novartis said Phase III clinical trials are continuing for "Mycograb," a development compound for treatment of severe fungal infections.

Shares gained less than 1 percent to 61.55 Swiss francs ($55.91) in Zurich.