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Will New Drug Approvals Boost Novartis (NVS) Portfolio?
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Novartis AG (NVS - Free Report) is currently going through a transitional stage. The company’s blockbuster drug, Diovan, is facing stiff generic competition in the United States, EU and Japan. The loss of patent protection for these top-selling drugs continues to hurt sales. Exforge is also facing generic competition in the United States and the EU. Oncology drugs are facing new competition from immuno-oncology therapies. Moreover, certain patents and extensions covering Afinitor and Gilenya will expire in 2018, 2019 and 2020. The negative impact of generic competition will impact sales by $2.5 billion in 2017.
CEO Joseph Jimenez will step down from his position in 2018. Vasant Narasimhan, M.D., Global Head of Drug Development and Chief Medical Officer, will replace him effective Feb 1, 2018.
Nevertheless, we believe that the approval of new drugs and label expansion of existing drugs will boost the company’s top line.
Psoriasis drug, Cosentyx, was approved for the treatment of two new indications — ankylosing spondylitis (AS) and psoriatic arthritis (PsA) in 2016. The uptake of Cosentyx has been strong and the company has grabbed market shares from rivals AbbVie Inc.’s (ABBV - Free Report) Humira and Amgen, Inc.’s (AMGN - Free Report) Enbrel. Cosentyx achieved blockbuster status in 2016 recording over $1 billion of sales. Novartis expects to garner $2 billion and $500 million of sales from Cosentyx and Entresto, respectively in 2017. Other approvals include Farydak, Odomzo and the combination of Tafinlar + Mekinist.
Novartis has a strong oncology portfolio of drugs like Afinitor, Exjade, Jakavi, Zykadia, Tasigna, Jadenu and an improved formulation of Exjade. The oncology portfolio received a further boosted with the approval of new drugs. The recent FDA approval of Kisqali, for use in combination with an aromatase inhibitor for the first-line treatment of postmenopausal women with hormone receptor positive, human epidermal growth factor receptor-2 negative (HR+/HER2-) advanced or metastatic breast cancer will boost the sales. The drug was also approved in Europe. Meanwhile, the FDA also approved a label expansion of Zykadia to include the first-line treatment of patients with metastatic non-small cell lung cancer. The European Commission (EC) has recently approved Tasigna for the treatment of pediatric patients with newly diagnosed Philadelphia chromosome-positive chronic myeloid leukemia in the chronic phase (Ph+ CML-CP) and pediatric patients with Ph+ CML-CP with resistance or intolerance to prior therapy including imatinib.
The FDA recently approved breakthrough gene transfer treatment, Kymriah suspension for the treatment of patients up to 25 years of age with B-cell precursor acute lymphoblastic leukemia (ALL) that is refractory or in second or later relapse. Kymriah, formerly CTL019, is the first chimeric antigen receptor T cell (CAR-T) therapy approved. The approval provided a major boost to Novartis. The approval opens up new frontiers in the treatment of cancer by advancing immune-cellular therapy for children and young adults with r/r B-cell ALL which comprises approximately 25% of cancer diagnoses among children under 15 years. It is the most common form of childhood cancer in the United States. Kymriah has been launched in the United States.
Moreover, Sandoz holds a leading position in the biosimilars space with a portfolio of five marketed biosimilars currently and a deep pipeline. The biosimilar version of Roche Holdings’ (RHHBY - Free Report) Rituxan (rituximab). Rixathon was approved by the European Commission in June 2017. It is currently under review in the United States. The biosimilar version of Humira is also under review in the EU.
Novartis’ stock has rallied 19.5% year to date compared with the industry’s 18.1% gain. In the first half of 2017, Novartis announced that it is mulling strategic options for Alcon which includes retaining the business separation via capital market transactions such as a spin-off or an initial public offering. The company believes that the Alcon division has revived and hence a decision on a possible spin-off will be taken in 2019.
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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Will New Drug Approvals Boost Novartis (NVS) Portfolio?
Novartis AG (NVS - Free Report) is currently going through a transitional stage. The company’s blockbuster drug, Diovan, is facing stiff generic competition in the United States, EU and Japan. The loss of patent protection for these top-selling drugs continues to hurt sales. Exforge is also facing generic competition in the United States and the EU. Oncology drugs are facing new competition from immuno-oncology therapies. Moreover, certain patents and extensions covering Afinitor and Gilenya will expire in 2018, 2019 and 2020. The negative impact of generic competition will impact sales by $2.5 billion in 2017.
CEO Joseph Jimenez will step down from his position in 2018. Vasant Narasimhan, M.D., Global Head of Drug Development and Chief Medical Officer, will replace him effective Feb 1, 2018.
Nevertheless, we believe that the approval of new drugs and label expansion of existing drugs will boost the company’s top line.
Psoriasis drug, Cosentyx, was approved for the treatment of two new indications — ankylosing spondylitis (AS) and psoriatic arthritis (PsA) in 2016. The uptake of Cosentyx has been strong and the company has grabbed market shares from rivals AbbVie Inc.’s (ABBV - Free Report) Humira and Amgen, Inc.’s (AMGN - Free Report) Enbrel. Cosentyx achieved blockbuster status in 2016 recording over $1 billion of sales. Novartis expects to garner $2 billion and $500 million of sales from Cosentyx and Entresto, respectively in 2017. Other approvals include Farydak, Odomzo and the combination of Tafinlar + Mekinist.
Novartis has a strong oncology portfolio of drugs like Afinitor, Exjade, Jakavi, Zykadia, Tasigna, Jadenu and an improved formulation of Exjade. The oncology portfolio received a further boosted with the approval of new drugs. The recent FDA approval of Kisqali, for use in combination with an aromatase inhibitor for the first-line treatment of postmenopausal women with hormone receptor positive, human epidermal growth factor receptor-2 negative (HR+/HER2-) advanced or metastatic breast cancer will boost the sales. The drug was also approved in Europe. Meanwhile, the FDA also approved a label expansion of Zykadia to include the first-line treatment of patients with metastatic non-small cell lung cancer. The European Commission (EC) has recently approved Tasigna for the treatment of pediatric patients with newly diagnosed Philadelphia chromosome-positive chronic myeloid leukemia in the chronic phase (Ph+ CML-CP) and pediatric patients with Ph+ CML-CP with resistance or intolerance to prior therapy including imatinib.
The FDA recently approved breakthrough gene transfer treatment, Kymriah suspension for the treatment of patients up to 25 years of age with B-cell precursor acute lymphoblastic leukemia (ALL) that is refractory or in second or later relapse. Kymriah, formerly CTL019, is the first chimeric antigen receptor T cell (CAR-T) therapy approved. The approval provided a major boost to Novartis. The approval opens up new frontiers in the treatment of cancer by advancing immune-cellular therapy for children and young adults with r/r B-cell ALL which comprises approximately 25% of cancer diagnoses among children under 15 years. It is the most common form of childhood cancer in the United States. Kymriah has been launched in the United States.
Moreover, Sandoz holds a leading position in the biosimilars space with a portfolio of five marketed biosimilars currently and a deep pipeline. The biosimilar version of Roche Holdings’ (RHHBY - Free Report) Rituxan (rituximab). Rixathon was approved by the European Commission in June 2017. It is currently under review in the United States. The biosimilar version of Humira is also under review in the EU.
Novartis’ stock has rallied 19.5% year to date compared with the industry’s 18.1% gain. In the first half of 2017, Novartis announced that it is mulling strategic options for Alcon which includes retaining the business separation via capital market transactions such as a spin-off or an initial public offering. The company believes that the Alcon division has revived and hence a decision on a possible spin-off will be taken in 2019.
Zacks Rank
Novartis currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>