By Marta Falconi

Results from a late-stage trial showed that Novartis AG's (NVS) drug Ilaris helped relieve symptoms in patients suffering from the most severe form of childhood arthritis, the Swiss drug maker said Wednesday, confirming plans to submit the drug to regulators for this indication later this year.

The Phase III study showed that 62% of participating children with a rare and serious auto-inflammatory disease called systemic juvenile idiopathic arthritis, known as SJIA, became symptom-free when treated with the drug, also known as ACZ885 or canakinumab, against 32% of those taking a placebo after an initial treatment with the drug. The study also showed that one-third of the patients were able to stop taking steroids within five months and that ACZ885 can extend the time to the next flare-up of the disease.

SJIA affects fewer than one child in every 100,000. These young patients can face joint destruction and growth retardation, with serious developmental and psychological consequences.

The Basel-based company, which will present the study's results on Thursday at the annual congress of the European League Against Rheumatism in Berlin, said ACZ885 regulatory submissions for use in SJIA are "on track for 2012."

Ilaris is already approved in more than 60 countries for the treatment of adults and children as young as four years suffering from cryopyrin-associated periodic syndrome, a rare lifelong auto-inflammatory disease with debilitating symptoms and few treatment options.

A successful expansion of the drug's use would prove in line with the company's drug development strategy as it aims to develop drugs for rare diseases that can later be used to treat illnesses that affect more people, thus helping sales and profit.

Novartis also said a separate Phase II trial showed that 90% of patients with TRAPS, another rare auto-inflammatory disease, experienced clinical remission after one week of treatment with ACZ885. There is currently no approved treatment for TRAPS.

"We are committed to investigating new treatments that can address the existing unmet medical need in immune-mediated diseases, no matter how rare some of these conditions may be," said John Hohneker, head of development for integrated hospital care for Novartis's pharma division.

ACZ885 is a monoclonal antibody which works by blocking an inflammatory protein called interleukin-1 beta, an important part of the body's immune system defenses. Excessive production plays a major role in certain inflammatory diseases, including SJIA and TRAPS.

The positive results in both indications may add $200 million to current sales forecasts of the drug of $80 million, which are solely based on the approved indication of CAPS, said Zurich-based analyst Karl-Heinz Koch with Helvea. "However, for Ilaris to become a meaningful drug for Novartis, Phase III studies in atherosclerosis would have to be positive, with results not expected before 2014," said Koch, who has a Buy rating on Novartis.

At 0934 GMT, Novartis shares were trading 0.5% higher at CHF49.78.

Write to Marta Falconi at marta.falconi@dowjones.com

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