Novartis and the Innovator's Dilemma

Novartis' most important new drug candidate, the innovative irritable bowel syndrome drug tegaserod, has been rejected by both European and US regulatory agencies. But while it and other drug firms may blame regulatory groups for becoming too risk averse, or for worrying about the costs of drug treatment, it's just as likely a problem of innovation. The agencies know how to deal with me-too drugs--it's the breakthroughs that are problematic.

As IN VIVOwent to press, we received news that the Food & Drug Administration had rejected Novartis AG 's application for approval of tegaserod (Zelnorm), arguably the company's most important new drug and the only important treatment on the near-horizon for irritable bowel syndrome (IBS). The blow is doubly devastating for the company, coming as it does just weeks after Novartis withdrew the drug's marketing application in Europe when the European Medicines Evaluation Agency (EMEA) appeared ready to deny it approval.

Reaction was predictable. Novartis shares have fallen about 10% since the EMEA meeting—the delays will cost the company, if analysts'...

More from Archive

More from In Vivo