Novartis' Type 2 diabetes drug Galvus won marketing approval in Europe.
The approval on Friday was expected after a panel of experts at the European Medicines Agency recommended supporting the drug in July.
Galvus is now approved in Europe for use with metformin, sulfonylureas and thiazolidinediones including GlaxoSmithKline's Avandia and Takeda's Actos. The approval applies to all 27 European Union countries, as well as Norway and Iceland. Galvus is also approved in Brazil and Mexico.
Meanwhile, Galvus faces a lengthy approval delay here in the US, where the FDA has asked for more data concerning the drug.
Novartis said it will not be re ready to resubmit Galvus to the FDA until 2009.
Galvus is in the same DPP-4 inhibitor drug class as Merck's recently-approved Januvia, however the Novartis drug approval has been held up in the US by concerns over skin toxicity.
Merck's lead in the market could mean Novartis will be at a disadvantage if and/or when Galvus is approved in the US, analysts said.
Galvus is one of the products Novartis is counting on to help the Swiss drugmaker recover from patent losses on older products such as its Lamisil anti-fungal treatment.
Analysts have predicted blockbuster sales of $1 billion or more annually for Galvus if it's approved in the US.