Diabetes drug Galvus (vildagliptin), the Novartis DPP-4 inhibitor which has been approved for sale in Europe but remains stalled at the FDA, appears increasingly unlikely to make it to the U.S. market anytime soon, giving a further boost to rival diabetes drug Januvia (sitagliptin).

One financial analyst, Chris Schott of the Bank of America, even suggested in a note published following a meeting with Novartis management that "we now believe U.S. development for Galvus could be discontinued if U.S. regulators require further liver studies on the drug."

Novartis disclosed a week ago that test results showed elevated liver enzymes in some patients who took a once-daily 100 mg dose of the drug, leading the company to decide to drop the larger dose in favor of a twice-daily 50 mg dose before it starts selling the drug in Europe.

The dosing change will put Galvus at a further competitive disadvantage against Merck's rival DPP-4 inhibitor, Januvia, which has once-daily dosing.

Schott said he would not be surprised to now see a request for a new liver study for Galvus from "a conservative FDA," which already is seeking additional data related to skin-toxicity concerns.

A Novartis spokesperson disputed the analyst's comments, terming them "pure speculation," and said "discussions are continuing with the FDA in taking the steps necessary to gain approval for this drug."

But the problems with Galvus are providing a huge boost for Januvia, which was approved for sale in the U.S. a year ago. Galvus is not expected to make it to the U.S. market until 2009 at the earliest.

Both Galvus and Januvia are DPP-4 inhibitors, which are designed to enhance the body's own ability to lower elevated blood sugar. A major attraction of this class of drugs is that unlike many existing diabetes medications, DPP-4 inhibitors do not appear to result in weight gain.