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Novartis (NVS - Analyst Report) received positive news when the European Commission (EC) approved Xolair for an additional indication.

Xolair is now approved in Europe as an add-on therapy for the treatment of chronic spontaneous urticaria (CSU) in adult and adolescent (12 years and above) patients with inadequate response to H1-antihistamine treatment.

We note that Xolair is already approved in Europe for severe persistent allergic asthma in children (aged six and above), adolescents and adults. Novartis also launched a liquid formulation of the drug in pre-filled syringes in most European countries.

Xolair is also approved for moderate-to-severe persistent allergic asthma in the U.S. We note that Novartis licensed Xolair from Roche’s (RHHBY - Analyst Report) Genentech. Roche markets Xolair in the U.S.

The approval for the CSU indication was on the cards as the Committee for Medicinal Products for Human Use (CHMP) had given a positive opinion on Xolair in Jan 2014 based on positive results from three pivotal phase III registration studies (ASTERIA I, ASTERIA II and GLACIAL). The results from the studies showed that Xolair 300 mg met all primary and pre-specified secondary endpoints across these studies. Xolair also significantly improved itch and hives, including rapid itch relief, and in many cases cleared symptoms.

Xolair is currently under review for the CSU indication in the U.S. The label expansion of the drug will further boost sales. Xolair generated sales of $613 million in 2013, up 24% from a year ago.

Novartis currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the sector include Novo Nordisk (NVO - Analyst Report) and Forest Laboratories . Both carry a Zacks Rank #2 (Buy).

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