In a move that could impact the revenues of two of the largest pharmaceutical majors, Novartis and Bristol-Myers Squibb decided to p ull out a crucial drug, Zelmac, from the approval process in Europe. Zelmac was a treatment for irritable bowel movement that was being developed by both companies and for which they had entered into an agreement for sharing sales.

The withdrawal of the drug from the European regulators is understood to be the result of a disagreement between the two companies over clinical results. However, Zelmac is still expected to be cleared soon by the drug regulators in the US, the world’s largest market for the drug.

The Swiss company, Novartis, has stated that it would study all options for resubmitting the drug for approval in Europe.

For Bristol this news comes as yet another disappointment as it battles ebbing investor confidence. The company recently announced that it would divest its non-drug businesses in an attempt to concentrate on the faster-growing pharmaceutical business. With its own laboratories being unable to churn out new drugs in pace with the company’s rivals, Bristol had entered into an marketing alliance with Novartis on Zelmac. The company also suffered another blow in March this year when the US regulators rejected a cancer drug being developed by the company.