Novartis takes $120 million charge as it drops vadimezan development

Swiss drug major Novartis (NOVN: VX) this morning said that the clinical trial program for the investigational cancer treatment ASA404 (vadimezan) will be discontinued and resources will be reallocated to other compounds in the oncology pipeline.

As a result, the company noted, an intangible asset impairment charge of approximately $120 million will be taken in the fourth quarter of 2010 in the Novartis Pharmaceuticals division.

Novartis acquired rights to ASA404, which was once touted as having blockbuster – at least $1 billion – sales potential. Under the terms of that deal, UK-based Antisoma (LON: ASM) received an upfront $75 million in April 2007 and a further $25 million on starting the Phase III study. It was also eligible for milestone payments of up to $890 million. Antisoma’s shares were down 5.8% at 6.5 pence in morning trading.