But these days the banner has a "Dewey Defeats Truman" air-a premature prediction of victory. What was seemingly a sure thing only a year ago, the launch of a revolutionary and handsomely profitable drug to treat the debilitating condition known as irritable bowel syndrome, has now been downgraded to a question mark at best.
It began June 15 as a cadre of top executives, including Kurt Graves, the 33-year-old wunderkind charged with turning the drug into a blockbuster, gathered in a conference room at Novartis' East Hanover, N.J., offices. They hoped to receive a fax from the Food and Drug Administration clearing the product, now called Zelnorm, for marketing. A continent away, executives at the company's Switzerland home base patched in by phone for news on the drug that some analysts bet could eventually be worth a billion dollars a year in sales.
Novartis had strong reason to believe the fax machine would spit out a green light. In August 2000, the FDA delivered what the agency calls an "approvable letter," meaning the drug was on track for clearance. Over the ensuing months, Novartis had cooperated with FDA regulators, providing additional data requested on safety and effectiveness. The company even complied with a quizzical midstream FDA request to switch the two-year-old drug's name from Zelmac to Zelnorm to avoid potential confusion with Zantac or Zyrtec.
Novartis, meanwhile, appeared to catch a break when the FDA forced then-Glaxo Wellcome to yank its potential irritable bowel syndrome competitor Lotronex off the market last November because of safety concerns.
Novartis was prepared for a splashy launch. It signed an agreement with drug powerhouse Bristol Myers-Squibb to co-market the pill. Mr. Graves, the senior VP-general manager of commercial operations, hired New York agency Cline, Davis & Mann, which had turned Viagra into a household (bedroom?) name. With Viagra, Cline Davis had refashioned "impotence" as "erectile dysfunction," an easier way for people and doctors to speak about a one-time taboo subject.
As with Viagra, communications for irritable bowel syndrome would have to lay the groundwork for people to discuss the complicated condition in an easy way; the problem is not well known nor easily spoken about even though an estimated 40 million Americans suffer from it. For Zelnorm, Mr. Graves and Cline Davis had teed up a doctor-targeted campaign with the catchy and simple "ABCs of IBS" aphorism standing for abdominal pain, bloating and constipation (the symptoms of the condition). A multimillion dollar direct-to-consumer TV and print campaign would likely have followed six months or so later.
"We were geared up to have the best launch this company has ever seen and maybe one of the best launches the industry has ever seen," Mr. Graves said.
Then, the FDA kibosh came June 15. The agency faxed a "not approvable" letter questioning the link between abdominal surgery and the drug. The company appealed the decision, but concedes "the likelihood is low" of a reversal, according to Joerg Reinhardt, Novartis' head of preclinical and clinical development. Zelnorm may not win approval until 2003 at the earliest, and there is a chance it may not get U.S. clearance at all. The drug, however, last week was launched in Mexico under the Zelmac name and success there could bolster its case in the U.S.
In the end, the withdrawal of Lotronex from the market, which frustrated some patients and doctors who were left with no other choice, may have hurt Zelnorm. In the mid-1990s, the FDA came under siege from the new Republican-controlled Congress for being too slow in approving potentially life-saving drugs. And the agency responded, improving its approval times.
But now the tide appears to have been reversed. After the FDA suffered a series of black eyes-pulling diabetes drug Rezulin and then Lotronex off the market because of safety concerns-the agency has grown increasingly cautious about clearing new products.
"We think that potentially politics entered into the scene a little bit here and have gotten everybody a little bit distracted from the unmet need that exists in the [irritable bowel syndrome] marketplace where there is no effective therapy on the market," Mr. Graves said.
An FDA spokeswoman said decisions are made solely on the data backing a drug.
Several weeks after the Zelnorm roadblock, Novartis received another setback. The company had hoped to begin marketing with partner Genentech a novel drug named Xolair, which simultaneously treats allergies and asthma with a long-lasting injection, later this year. But the FDA issued a July letter requesting more data. Now, Xolair may also be two years away from market.
Other blows have not been entirely due to the FDA. A week after the Xolair flap, Novartis said it would delay its filing for approval of schizophrenia drug Zomaril by a year until late 2002. Another hiccup has been the slow rollout of the much-hyped diabetes treatment Starlix since its launch in February-advertised with a brand icon that looks like Robocop representing the "mealtime guardian" who helps fight post-meal glucose increases-which has failed to take off at the level some expected.
Figures for June 2001, the most recent available from NDC Health, show Starlix posted $1.6 million in U.S. retail sales, while competitor Novo Nordisk's Prandin had $2.8 million. "Starlix has had a very unexciting, lackluster launch," said Sandi Merwitz, an analyst with ABN AMRO in London.
To be sure, the FDA has not been a continual needle in the arm of Novartis. This spring, it approved a potentially revolutionary leukemia drug Gleevec in only 2 1/2 months through its fast-track avenue. And the world's sixth-largest drug company has had seven drugs cleared in the last 18 months by the FDA, compared to no more than two for any others in the top 10. "It's a consequence of timing," said Mr. Reinhardt of the run of FDA barricades.
Novartis had counted on Zelnorm, Xolair and Starlix to make 2002 a banner year. ABN AMRO projected global sales of Zelnorm to reach $400 million-plus annually on a global scale at its peak; others had it pegged at $1 billion a year. The setbacks have hurt the company's stock; it traded late last week at $35.74 a share, down from its 52-week high of $46.87. Company executives and analysts say Novartis will deliver on its earnings projections.
The company's new-drug pipeline is still highly respected in the industry. A new potentially hot-selling eczyema drug Elidil could be approved later this year and Lamisil, where the prescription version treats toenail fungus, continues to grow. New Alzheimer's treatment Exelon has posed a challenge to Pfizer's first-to-market Aricept. Also, once-foundering cardiovascular drugs, Diovan and Lotrel, last year generated some $600 million in U.S. sales after Mr. Graves mounted marketing charges behind them.
The company said it is redeploying the more than $580 million set aside for marketing the its ballyhooed drugs-Zelnorm, Starlix and Xolair-to boost the other drugs in its portfolio.
But as the banner that still hangs at Novartis shows, the Zelnorm snafu may penetrate deeper than the bottom line. "I think psychologically it has had a lot bigger impact than it has financially," said Mark Ravera, an analyst with Mehta Partners.
No one has felt that sting more than Mr. Graves, a former linebacker from Michigan's Hillsdale College. As drug companies become increasingly more marketing focused, it is executives like Mr. Graves who will be counted on more than ever to drive sales.
"He is smart and aggressive, but he's also empathetic," said Matt Giegerich, CEO of WPP Group's CommonHealth, which handles several Novartis brands. "He's disarming in a way because you look at him and you think this guy's going to be real intense, but at the same time he's kind of soft-spoken."
Mr. Graves said he moped a bit after the Zelnorm trouble, but emerged with the determination to fight on.
He's done the seemingly impossible before. As a sales representative at Merck, he was handpicked by a top executive because of his pre-med background to serve as a liaison between the sales and marketing staffs to deal with a restrictive "blackbox" warning on heartburn drug Prilosec. At the time, the drug was known as Losec in the U.S. and competing sales reps from Glaxo were telling doctors the drug stands for "Leave on shelf, extremely carcinogenic."
The liaison role, however, wasn't simply to conduct wine and cheese get-to-know-yous. Mr. Graves was exiled to a room resembling a National Archives warehouse containing every study and journal article available on Prilosec. After three months, he found a discrepancy in an obscure European study showing that Prilosec's potential as a carcinogen was no worse than Zantac's.
The discovery helped launch Prilosec's purple reign, where the purple pill generated more than $6 billion in sales last year. Mr. Graves rose through the ranks at Merck rapidly and later headed up the Prilosec business at the joint venture AstraMerck.
Mr. Graves joined Novartis in 1999 and began to transform its approach to marketing. "We were not really known as a company that was highly regarded for mass marketing, but since Kurt came on we've seen significant acceleration of sales, especially for Lotrel and Diovan," Mr. Rheinard said.
There is a certain machismo developing in drug marketing where the ability to launch a blockbuster from scratch is becoming the Holy Grail on a resume. Though Mr. Graves has Prilosec under his belt, he won't become a magician at Novartis with drugs such as Diovan and Lotrel. It is Zelnorm where his potential indelible imprint lies. Will the FDA give him the chance?