Novartis' struggling vaccine unit got a shot in the arm today when the European Medicines Agency (EMA) recommended for approval, Bexsero, its potential blockbuster vaccine for meningitis B. The EMA earlier asked for additional data from the Swiss company before deciding whether to recommend it.
The EMA points out that there was no vaccine for the disease, which infects about 7,000 children a year in the EU, of which 8% will die and many others will have permanent brain damage. About 1.2 million cases of invasive meningococcal disease are recorded worldwide, the agency says. The European Commission would be expected to approve it within a couple of months but its success will still depend on each country working it into the vaccination campaigns, Reuters says. Novartis ($NVS) is still working on clinical trials for the vaccine in the U.S. before seeking FDA approval. Because the disease is so harsh and few options are available against it, some analysts have pegged global sales for Bexsero at $2 billion by 2020.
While the EU market for the vaccine is only about $200 million, the approval is more a vindication for Novartis, which bought its way into the vaccine side of the market in 2006 with the $7.5 billion acquisition of Chiron. It created a vaccines and diagnostics division that reached sales of about $2.9 billion in 2010, but that year it was boosted by extra revenue generated from selling vaccines during the H1N1 flu pandemic. Last year, the revenue was down nearly a third to $2 billion and the business suffered a $249 million operating loss, even as other companies have seen their vaccine divisions expand.
Last month, Barclays analyst Michael Leuchten told Bloomberg that if the EMA repudiated the vaccine, Novartis would probably look at restructuring the unit or even exiting the business altogether.
- here's the EMA decision
- read the Reuters story
- get more from Bloomberg