Novartis ($NVS) hit a key turning point with its vaccines division when a European Union committee backed the company's Bexsero meningitis shot. The European Medicines Agency's Committee for Medicinal Products for Human Use recommended the granting of marketing authorization to Novartis for Bexsero, saying it should be given to children ages 2 months and older.
This is welcome news since failure to gain approval might have forced the company to scale back its vaccine unit, Bloomberg reports. Novartis built the unit through a $7.5 billion acquisition of Chiron, completed in 2006.
"This is clearly good news," Alistair Campbell, an analyst with Berenberg Bank in London, told Bloomberg. "We've been waiting a long time for the approval and the delay had raised questions about the viability of the division."
Analysts vary in their sales predictions, saying the shot could generate annual revenue of about $700 million by 2020 to sales of $1.45 billion by 2016. Either way, it seems Bexsero is just what Novartis needed to jump-start its vaccine unit. In 2010, the Vaccines and Diagnostics division hit a high of $2.9 billion on revenue from influenza vaccines sold during the H1N1 flu pandemic. But last year, revenue reached only $2 billion, and the business suffered a $249 million operating loss.
Meningitis, an illness caused by viruses, fungi and bacteria, leads to an estimated 170,000 deaths worldwide each year, according to the World Health Organization. Meningitis type B--the strain Bexsero fights--accounts for as many as 40% of cases in North America and as many as 80% in some European nations.
- read the Novartis release
- check out the EMA's release
- here's more from Bloomberg
- see the FierceBiotech story