Novartis Cell-Based H1N1 Vaccine Gets German OK

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ZURICH -(Dow Jones)- Swiss drugmaker Novartis AG (NVS) Thursday said it received regulatory approval to sell its cell-based swine flu vaccine in Germany, marking an important milestone in gaining acceptance for newer rapid ways of producing vaccines.

The vast majority of influenza vaccines is produced in chicken eggs, a manufacturing method that's been around for decades.

Novartis, based in Basel, said the vaccine, which is sold under the brand name Celtura, contains a booster ingredient called MF59. Such booster ingredients are called adjuvants and aim to make the shot more effective. They were shown to be safe in clinical testing, but as mass vaccination programs are getting under way in Europe, concern about possible side effects emerged, because adjuvanted vaccines haven't been on the market for long yet.

The U.S. in its swine flu vaccination programs doesn't use adjuvanted vaccines.

Novartis aims to get approval for Celtura in other countries, including Japan and Switzerland.

"Overall the German approval of this cell-based vaccine is good news, as it demonstrates the ability of the healthcare regulators to rapidly understand cell-based vaccines," said Andrew Weiss, analyst in Zurich with Swiss bank Vontobel, who has a buy rating on the stock.

Celtura is manufactured in Marburg, Germany, and is indicated for immunization of persons six months of age and older.

Clinical studies, involving around 1,850 people, showed that even with the lowest antigen content a single Celtura dose can protect against the swine flu virus, Novartis said. The most frequent side effects reported were redness, swelling and pain, at the injection side. There were also complaints of mild fever, headache and fatigue, Novartis said.

The main benefit of cell-based vaccines are that it's easier to start-up mass production, when the need arises unexpectedly.

"Our modern cell culture technology can enable a faster start-up of vaccine manufacturing, offering the ability to respond more quickly to future pandemic threats", said Andrin Oswald, Chief Executive of Novartis Vaccines and Diagnostics.

Novartis is close to completing a second cell culture-based influenza vaccine manufacturing site in the U.S., which is being built in partnership with the US Department of Health and Human Services.

At 0835 GMT, Novartis shares were down CHF0.15, or 0.3%, at CHF53.10, in a lower Swiss market. The European health-care sector as a whole, was down 0.6%. Novartis shares have risen 0.6% so far this year, underperforming the European healthcare sector as a whole, which is up 0.6%.

Company Web site: http://www.novartis.com

-By Anita Greil, Dow Jones Newswires; +41 43 443 8044 ; anita.greil@dowjones.com

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11-05-09 0355ET