The European Union has approved Novartis's Starlix drug for type 2 diabetes. This gives the Swiss-based pharmaceuticals group a green light in a major market for what it hopes will be a blockbuster drug.
Starlix, derived from amino acids, is the first in a new class of drugs for treatment of type 2 (non-insulin dependent) diabetes. It is already on sale in the United States, Switzerland and Brazil.
It is one of five new drugs Novartis aims to launch in 2001 in a drive to have drug sales match the industry average this year and surpass the average in 2002 and 2003. Analysts expect drug sales growth of 10 per cent this year.
Novartis's shares were trading about 2 per cent higher in early business after news of the approval.
Mr Eric Bernhardt, who manages a healthcare fund for Swiss private bank Clariden, said Starlix might be able to reach sales of around $1 billion by 2005, adding that sales data from the US so far had been quite positive.
But Novartis may have to expend energy and resources to raise awareness of the drug's potential among doctors.
In healthy people glucose levels rise after meals but insulin levels rise as well to control blood sugar. Diabetics lack early levels of insulin release when they eat so glucose levels shoot above what they would be normally.
Starlix simulates early-phase insulin secretion.
Novartis said about 125 million people have type 2 diabetes and the figure is expected to rise to 300 million by 2025.