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Novartis Gets Positive CHMP Opinion for Drugs, Biosimilar

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Novartis AG (NVS - Free Report) announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has recommended approval of Gilenya for the treatment of children and adolescents aged 10 to 17 years with relapsing remitting forms of multiple sclerosis (RRMS).

The positive opinion was based on encouraging results from the landmark phase III trial, PARADIGMS. Results of the trial showed that Gilenya substantially reduced the debilitating impact of MS in young patients. 

Gilenya is already approved in Europe for the treatment of adults aged 18 years or older with RRMS.

The label expansion of Gilenya will further boost sales.

In addition, the CHMP also gave a positive opinion for the approval of voretigene neparvovec, a one-time gene therapy for the treatment of patients with vision loss due to a genetic mutation in both copies of the RPE65gene. Voretigene neparvovec is marketed as Luxturna in the United States by Spark Therapeutics . A decision from the European Commission is expected in two months.

Upon approval, voretigene neparvovec will be marketed by Novartis in markets outside the United States.  We remind investors that Spark Therapeutics entered into a licensing and supply agreement with Novartis in January 2018, covering development, registration and commercialization rights to Luxturna in markets outside the Unites States.

Moreover, the generic arm of Novartis, Sandoz, also obtained a positive CHMP opinion for marketing authorization of its proposed biosimilar of Neulasta (pegfilgrastim). Sandoz is seeking approval of the biosimilar for the same indication as the branded drug. Sandoz currently has seven approved biosimilars in its portfolio.

Meanwhile, Novartis also announced new positive data on pipeline candidate, brolucizumab (RTH258), from the phase III trials — HAWK and HARRIER. The data show that brolucizumab 6 mg had superior fluid resolution as compared to Regeneron Pharmaceuticals, Inc.’s (REGN - Free Report) Eylea, over four visits during weeks 36 to 48. 

The data from pre-specified secondary endpoints of the HAWK and HARRIER trials were presented at EURETINA 2018 as a follow-up to data presented in November 2017. HAWK and HARRIER achieved their primary endpoints of non-inferiority in mean change in best corrected visual acuity (BCVA) at week 48 with brolucizumab versus Eylea. Novartis will file for approval of the candidate with regulatory bodies, in December 2018.

Approval of new drugs and label expansion of existing drugs bode well for Novartis. The company’s shares have gained 5.2% in the year so far compared with the industry’s growth of 10%.

 

The company has a strong oncology portfolio, including drugs like Afinitor, Exjade, Jakavi, Zykadia, Tasigna, Jadenu and Kisqali, which continue to boost sales. However, it is facing the loss of patent protection for some of the key drugs. Consequently, the company has restructured its business and plans to focus on building its portfolio in potential markets.

Earlier this month, the company announced that it has agreed to sell selected portions of its generic division, Sandoz, in order to focus on high-growth areas. The company will sell Sandoz’s dermatology business in the United States and generic U.S. oral solids portfolio to Aurobindo Pharma USA Inc. for $0.9 billion of cash and $0.1 billion of potential earn-outs. 

Novartis also intends to spin-off its ophthalmology division, Alcon, into a separately-traded standalone company to grow as a medicines company solely.  The Alcon business wasn’t performing as per management’s expectations. Although it did revive in between, the company decided to spin-off the same in order to focus better on its legacy drug business. Novartis also exited its antibacterial business. Earlier, it also divested its stake in the OTC joint venture with GlaxoSmithKline (GSK - Free Report) for $13 billion.

Zacks Rank

Novartis currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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