The Book on Daniel - Pharmaceutical Executive


The Book on Daniel

Pharmaceutical Executive

Novartis By the Numbers

After hitting a seven-year low in March, Novartis' stock is on the rebound, with analysts giving high grades to its pipeline. At a time when rivals like Pfizer and Merck achieve boa-like growth, swallowing more productive, slightly less enormous prey, Novartis boasts an in-house R&D engine that seems to run better with age. (See box)

In the first half of 2009, the two main therapeutic franchises, oncology and cardiovascular, both recorded a 15 percent rise in sales. (See box, above.) "Novartis has succeeded in launching products in a fairly wide range of categories, from big primary-care drugs to niche spaces where there is little competition," says Datamonitor pharma analyst Simon King. "Even their patent cliff isn't the kind of threat of, say, Glaxo's or Pfizer's."

Novartis' top two products, Diovan (number one in the anti-hypertensive market) and Gleevec (the "magic bullet" for CML), lose exclusivity in 2012 and 2015, respectively. But according to JP Morgan Securities, projected sales from nine new (or newly formulated) drugs launched since 2007 are set to break $7 billion just as those cash cows quit producing milk. But what the pipeline lacks in big hitters, it partly makes up for with a robust mix of targeted, hormonal, and cytotoxic therapies. "In the rush to develop high-margin targeted agents like Avastin, most other Big Pharmas are abandoning these older approaches," says Decision Resources analyst Kate Keeping. "Novartis has gone the other direction."

Most innovative is mTOR pathway inhibitor Afinitor, which won FDA approval for kidney cancer in March. (Keeping projects peak sales of $500 million in 2015.) The three novel molecules in Phase III are being tested in lung cancer, ovarian cancer, and a series of niche cancers. Decision Resources is bullish on their value for patients, but bearish on their sales—around $200 million or less.

PLANNED FILINGS 2009 to 2012 and beyond
Novartis' money minter is Diovan (valsartan), an angiotensin receptor antagonist that soars among chemicals for high blood pressure. Vasella has been deploying a range of tactics to blunt the fall off this steepest patent cliff. Tekturna (aliskiren), the novel direct renin inhibitor was hailed as the first new approach to hypertension at its 2007 approval. But this blockbuster-wannabe notched a measly $120 million last year. "Novartis is a victim of its own success," says Decision Resources' Graeme Green. "Diovan works great for most people; persuading them to switch to Tekturna is a no-win." Meanwhile, Novartis has been employing Diovan life cycle management, marketing it in combination with a calcium channel blocker amlodipine to create Exforge, and adding a diuretic to create Exforge HCT.

In February, Novartis inked a deal with Portola Pharmaceuticals for $75 million up-front and up to $500 million in milestones for a Phase II anti-clotting drug elinogrel, which would compete for the a piece of the enormous Plavix pie. The company also nabbed Speedel's cardio drug pipeline in its quest for Tekturna. And in August, Novartis got the nod from FDA to sell a copy of Betaseron, Bayer's old interferon-B drug. "It's a way to build a strong commercial and medical organization ahead of FTY720," said Joe Jimenez.


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