Seralaxin, a drug developed by Novartis AG (ADR) (NYSE:NVS) for the treatment of heart failure, has flopped dimming hopes of ever becoming a blockbuster as it was initially thought it would be. The drug missed its endpoint by failing to slow down the progression of the disease and also by not reducing the risk of death.
As a drug designed to combat acute heart failure, Serelaxin was supposed to help in relaxing blood vessels to reduce the burden of the heart in pumping blood. This is because the condition is characterized by shortness of breath since the heart is struggling to pump blood.
Troubled trial history
Though the admission of failure is only coming now, signs had been there for a long time as the drug’s trial history has been troubled from the start. In 2014, the drug was denied the approval of the U.S. Food and Drug Administration and regulators in Europe. The chief of drugs development at one of the top biotech stocks, Vas Narasimhan, indicated that the Swiss pharmaceutical firm would analyze the clinical data from the trial in order to find out what went wrong with Serelaxin.
With Seralaxin now out of the picture, pressure will be piled on Novartis to increase the sales of Entresto, which have not been spectacular so far. This was according to various analysts including those from Deutsche Bank.
“The failure of serelaxin will refocus the importance of Entresto to meet consensus long-term sales expectations as well as the importance for management to bolster its pipeline,” said Tim Race an analyst at Deutsche Bank.
The Serelaxin failure also reduces the portfolio of drugs that could potentially turn out to be blockbusters for Novartis to just 12. Initially Serelaxin was considered a possible candidate that could have filled a gap that will be created once other heart drugs by Novartis lose patent protection. One of them, Diovan, lost patent protection five years ago. According to projections from Swiss analysts, the drug had the potential to record sales of more than $2 billion by 2020 had it been approved.
On Wednesday shares of Novartis AG, one of the best biotech stocks, edged downwards by 0.27% to close the day at $74.19.