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Novartis (NVS - Analyst Report) presented encouraging new data on its ophthalmology drug Lucentis at the European Society of Retina Specialists (EURETINA) in Germany.

Lucentis is approved for wet age-related macular degeneration (AMD) in over 100 countries. It is also approved for the treatment of visual impairment due to diabetic macular edema (DME) and macular edema secondary to branch- and central-retinal vein occlusion (BRVO and CRVO), and choroidal neovascularization secondary to pathologic myopia (myopic CNV).

The data observed in the phase III study, RADIANCE, showed that Lucentis was superior to current standard of care and improved mean visual acuity by around 14 letters at one year with a median of two injections.

Additionally, the data from various trials indicate that early treatment initiation with Lucentis will result in better vision gains in DME patients.

We note that Novartis has a collaboration agreement with Roche’s (RHHBY - Analyst Report) Genentech for Lucentis.

While Roche holds the commercial rights of Lucentis in the U.S., Novartis holds the rights to develop and market Lucentis outside the U.S.

We remind investors that Novartis also pays royalties to Roche on net Lucentis sales outside the U.S.

Lucentis, one of the key drivers of revenue growth for Novartis in 2012, generated sales of $1.2 billion in 1H13, up 1% year over year.

In Jul 2013, Lucentis was approved to treat patients with visual impairment due to CNV, secondary to myopic CNV in Europe as well.

Label expansion for the additional indication will further boost sales of the drug, which bodes well for both Novartis and Roche.

Novartis currently carries a Zacks Rank #3 (Hold). Right now, Bayer (BAYRY - Analyst Report) and Novo Nordisk (NVO - Analyst Report) look attractive with a Zacks Rank #2 (Buy).

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