Novartis shares have fallen after US regulators said a unit that developed a costly breakthrough gene therapy knew about potential manipulation of animal testing data but failed to disclose it before the treatment was approved.
The Swiss drugmaker became aware of a data problem on March 14 but didn’t alert the US regulator, the FDA for more than a month after the agency’s approval of the drug on May 24.
The therapy, Zolgensma, is the most expensive medicine in the world, selling for $2.1m (€1.9m). Novartis shares fell over 2% in Zurich trading. Novartis is a large employer in Ireland employing 1,200 people, including at a manufacturing and development base in Ringaskiddy.
The company’s actions are being assessed and could lead to civil or criminal penalties, said Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research.
The data manipulation doesn’t call into question the safety or effectiveness of Zolgensma and the drug will remain on the market, according to the FDA.
Novartis has faced questions over conduct before, notably last year when payments made to US president Donald Trump’s lawyer Michael Cohen were disclosed, prompting the company to shake up its legal team and name a new head of ethics, risk, and compliance.
“The Zolgensma issue just shows how difficult it is to change the culture in Novartis, despite the new CEO having made this a key priority,” Stefan Schneider, an analyst at Vontobel in Switzerland, wrote in a note to clients.
Novartis said it is confident in the medicine’s safety. The therapy is approved for the treatment of young children with spinal muscular atrophy. The company said it doesn’t expect the issue to impact regulatory filings or development programmes for the medication.
AveXis, the Novartis unit that developed Zolgensma, told the FDA on June 28 that company personnel had manipulated data from product testing done in animals as part of the development of its manufacturing process.
There is no evidence that any of the human study results were manipulated and only a tiny portion of the earlier data was flawed, Mr Marks said.
While the flawed data may call into question some of the findings from the earliest human studies of Zolgensma, it should have no effect on later-stage studies that are producing evidence that the treatment can transform the lives of patients, he said.