Novartis' Bexsero picks up FDA nod--but with competition looming, approval isn't everything

After years of pinning its vaccine ambitions on meningitis B shot Bexsero, Novartis' ($NVS) FDA approval is here. But as it prepares to fork over the jab--along with the bulk of its vaccines business--to deal partner GlaxoSmithKline ($GSK), there are other hurdles in the way of its success--including some new competition from Pfizer ($PFE).

Bexsero will trail the New York drugmaker's Trumenba, approved in October, to the U.S. market after solid Phase II results helped Pfizer's product leapfrog Novartis' in the regulatory race. To establish an edge, the Swiss pharma is touting Bexsero's two-dose regimen--as opposed to the three doses Trumenba requires--and a flexible dosing schedule.

GlaxoSmithKline, for one, is hoping Bexsero can find its place in the sun as it prepares to fold in the unit it last spring agreed to buy for $7.1 billion. The British company is counting on a bolstered vaccines division--as well as a few other core franchises--to drive 70% of sales going forward, and with the global market for meningitis vaccines set to triple to $3.6 billion by 2020, it thinks Bexsero can help it get there.

"The addition of Bexsero, a new vaccine for the prevention of meningitis B ... will strengthen GSK's position in one of the fastest-growing segments of the vaccines market," the company told shareholders last year.

Novartis touted growth in that market earlier this week, reporting "solid demand across the product portfolio" that "was driven by the meningitis franchise." But even with that demand, net sales sunk 2% in the fourth quarter, dropping to $494 million from $503 million in the year-ago period.

One problem area weighing on its top line that may soon be GSK's to deal with: Bexsero price negotiations in the U.K. Though the U.K.'s Joint Committee on Vaccination and Immunisation (JCVI) decided 10 months ago to cover the jab for all babies and price discussions have been going on since last August, the government and Novartis have yet to reach a compromise that both parties find agreeable--and recent reports suggest they're not even close.

In November, U.K. Health Secretary Jeremy Hunt accused the Basel-based company of holding the government to "ransom" with its list price of £300 ($504) for a four-dose course--well above the £3 to £22 range a study from The BMJ found would be cost-effective for the country.

Novartis Vaccines head Andrin Oswald

But the way Novartis' head of vaccines, Andrin Oswald, sees it, the company has "gone to great lengths to support a swift implementation of a vaccination campaign." That reportedly includes offering up the first million doses of Bexsero for free in an effort to "ensure a rapid start to a vaccination campaign."

- read Novartis' release

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