(This updates an item published at 0929 GMT with further background.)
By Anita Greil
Of DOW JONES NEWSWIRES
ZURICH -(Dow Jones)- Novartis AG (NVS) Friday said it received regulatory approval to sell its hepatitis B treatment Sebivo in China, the country where the disease is most widespread.
Novartis, based in Basel, Switzerland said the Chinese decision comes shortly after the European Union health regulator recommended approval. Sebivo will be available in China from April.
The U.S. Food and Drug Administration approved the drug, selling under the brand name Tyzeka in the U.S., in October last year.
As many as 350 million people worldwide are infected with the hepatitis B virus, of whom more than 100 million people live in China, where the virus is considered to be a leading cause of death, Novartis said.
"Chronic hepatitis B is a major health problem in China, and through treatment, we aim to prevent the progression of the disease by getting the viral load to as low a level as possible," said Jidong Jia, Director of the Liver Research Center at the Beijing Friendship Hospital, an investigator on two of the company-sponsored studies of Sebivo.
Analysts caution that treatment of hepatitis B isn't very widespread because only up to 15% of people infected with the virus develop chronic liver disease. What's more, cheap older treatments are available, although they often have more severe side effects than newer drugs, such as Sebivo.
"The potential market is huge," said pharmaceutical analyst Denise Anderson in Zurich, who has a reduce rating on Novartis. "However, the availability of cheap drugs as well as a number of recently-launched new products combined with the purchasing power for most Chinese will likely limit sales in that market."
She expects the drug to generate worldwide sales of $220 million by 2010.
Novartis is selling Sebivo jointly with Idenix Pharmaceuticals Inc. (IDIX) in the U.S. and several European countries. Novartis has the exclusive right to sell the drug in the rest of the world, including China.
At 0955 GMT, Novartis shares were up CHF0.05, or 0.1%, at CHF67.35, in line with the broader market. The stock has underperformed its sector so far this year, having fallen 4.2%, while the sector as a whole, as measured by the MSCI Pharmaceuticals, has declined 0.5%.
Sebivo is the first drug from Novartis' emerging portfolio of anti-infective drugs, which appears set to become an important new therapy area for the Swiss drugmaker, said Karl Heinz Koch, pharmaceutical analyst at Swiss private bank Vontobel.
He estimates that Sebivo will generate sales of around $164 million in 2011, but says that all of the company's investigational anti-infective drugs together could achieve sales of several billion dollars over time.
Novartis is developing treatments for hepatitis C - which is more severe than hepatitis B and more widespread in the cash-rich West - and antifungal drugs as well as antibiotics.
Company Web Site: http://www.novartis.com
-By Anita Greil, Dow Jones Newswires; +41 43 443 8044 ; anita.greil@ dowjones.com
(END) Dow Jones Newswires
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