The FDA issued an approvable letter and wants another trial to look at the safety and efficacy of its Type 2 diabetes pill. Novartis shares are sinking and on track for a huge decline. But it’s wonderful news for Merck, which already launched its own Januvia pill last fall.

“This is one of the worst-possible scenarios,” Birgit Kulhoff, an industry in Zurich at Rahn & Bodmer, tells The Wall Street Journal (subscription required). “It will extend Merck’s lead by more than a year, meaning that it will be more difficult for Novartis to penetrate the market and it also casts a doubt over Novartis’ outlook, especially for next year, when they expected to return to double-digit sales growth.”

Galvus is one of two new drugs Novartis is hoping to launch this year in order to maintain its growth. Despite the setback, the drugmaker confirmed its financial outlook for the year, although a Novartis spokesman told Reuters there’s no new timetable for the review period.

“We are confident in the safety and efficacy of Galvus and will continue working closely with the FDA to agree on what final actions are required to obtain US approval,” JIm Shannon, who heads global drug development at Novartis, said in a statement.

Stiff upper lip, as they say.
[tags]Galvus, Januvia, Merck, Novartis[/tags]