NEW YORK (AP) -- Novartis AG said Tuesday it will take a charge of $590 million during the third quarter as it discontinues development of a potential hepatitis C drug and an antifungal product.
The Swiss company and its partner Human Genome Sciences Inc. had expressed concerns earlier in the year that the potential hepatitis C treatment Joulferon, known as Zalbin in the U.S., would not pass regulatory authority reviews. Studies had shown that the drug candidate was as effective as current treatments on the market, though required less injections.
Hepatitis C is an infectious disease that damages the liver and is currently treated with a mix of antiviral drugs.
In June, Human Genome said Zalbin would likely not gain Food and Drug Administration approval at its proposed 900-microgram, twice-monthly dosage, citing feedback from the agency. That statement followed a move by Novartis to pull the drug's application with European regulators over concerns additional studies would be requested.
Human Genome released a statement Tuesday saying it received an FDA request for more information, also called a "complete response letter" and that the partners decided to end development of Zalbin.
Meanwhile, Novartis said it is ending development of the antifungal agent Mycograb, which was aimed at treating a common yeast infection.
Novartis said it expects the charges to be partly offset by a $400 million gain in the fourth quarter from the sale of U.S. rights for the bladder treatment Enablex to Warner Chilcott PLC.
Novartis said the move to discontinue the hepatitis and antifungal treatments reflects an "enhanced focus on differentiated medicines most likely to address unmet medical needs."
Novartis' U.S. shares rose 87 cents, or 1.5 percent, to $57.92 in afternoon trading.