The Swiss drugmaker Novartis has been given the green light by the European Commission to sell Extavia, a multiple sclerosis drug. And although the firm has good reason to be happy, it shouldn’t be overjoyed as it faces tough competition.
Norvartis (nyse: NVS - news - people ), whose largest division of pharmaceuticals develops and manufactures prescription drugs to treat various diseases, said it will launch Extavia in the United States and Europe in the first half of next year.
But analysts warn the company will struggle to make ends meet in an already crowded market, prompting its shares to hardly move. Novartis shares rose 0.4%, or 2 cents, to $53.03 in morning trading in New York.
“It is difficult to know what market percentage Novartis is going to achieve with this new drug,” Tom Muller, an analyst with Theodoor Gilissen, told Forbes.com.
“They have to start from scratch. It will take them at least a couple of years to have a strong position in the market with solid competitors,” Muller said.
One of Novartis main rivals is German drugmaker Bayer (nyse: BAY - news - people ), which produces an already effective MS drug treatment of MS, Betaseron.
Novartis and Bayer settled a dispute over Betaseron in a deal that gave Bayer full control of the product while allowing Novartis to launch a version in 2009. Bayer's sales have been affected by copycat versions of its drugs in America and Europe.
Extavia is the first in a new portfolio of medicines from Novartis that is planned to include both established treatments and innovative therapies for patients with MS, the group said.
Multiple sclerosis, a progressive and debilitating disorder caused by the destruction of myelin, is the most common disorder of the central nervous system in young adults.
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