Novartis Yanks Zelnorm

The FDA's announcement sent Novartis' shares down 89 cents, or 1.6%, to $56.

Novartis executives told analysts during the conference call that withdrawing Zelnorm would force the company to re-evaluate this year's guidance for operating earnings and net income. They didn't offer an estimate.

Zelnorm produced $488 million in U.S. sales and $71 million in other countries' sales last year. Novartis said corporate sales growth for 2007 would be "above 5%." Previously, the guidance was for "mid- to high-single digit" sales growth.

The FDA approved Zelnorm in July 2002 for the short-term treatment of women suffering from irritable bowel syndrome (IBS) plus constipation. IBS symptoms include abdominal pain, bloating and constipation.

In August 2004, the FDA cleared the drug for men and women under 65 years old with a type of chronic constipation. Approximately 500,000 people in the U.S. take Zelnorm, a Novartis spokesman said.

Novartis executives they are discussing Zelnorm's fate with foreign regulators. The company has suspended marketing in Canada, but it is keeping the drug in Switzerland for certain indications. Zelnorm, also sold as Zelmac, is available in 50 countries.

The Zelnorm decision illustrates how the FDA must balance risks against benefits, especially for a drug that provides a unique treatment.

The FDA says that in late February and early March Novartis gave the agency new analyses of 29 clinical studies comparing Zelnorm and a placebo for an assortment of gastrointestinal problems.