Novartis Afinitor Backed in EU

Novartis AG (NVS - Snapshot Report) received a boost recently when the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) recommended approval of its drug Afinitor for the treatment of subependymal giant cell astrocytomas (SEGA), a benign brain tumor associated with tuberous sclerosis (TS), in the European Union. The European Commission is expected to give its decision within the next three months.

The drug will be marketed in the EU in the trade name of Votubia and will be the first medicine in the region for the treatment of this challenging disease, if approved. It is already marketed in the US as Afinitor for the disease. It is also approved in Switzerland Brazil, Colombia, Guatemala, the Philippines and South Korea to treat SEGA associated with TS. Novartis has filed for approval of the drug in many other countries.

The CHMP recommendation was based on data from a mid-stage study, which showed that 9 (33%) of 27 patients experienced a SEGA tumor reduction of 50% or more at six months relative to baseline. Also 21 of 27 patients experienced a 30% or more reduction in the size of their largest SEGA tumor.

20% of patients with TSC get affected with SEGA, for which brain surgery is the only treatment option so far for patients in the EU. The approval of Afinitor for the indication, in the EU, will boost the top line of Novartis significantly.

Afinitor is also currently marketed in the US and EU for the treatment of advanced renal cell carcinoma (kidney cancer) after an anti-VEGF therapy like Roche’s (RHHBY) Avastin, Pfizer’s (PFE - Analyst Report) Sutent or Onyx Pharmaceuticals’(ONXX - Analyst Report) Nexavar.

Afinitor also received approval in May 2011 for the treatment of patients with advanced advanced neuroendocrine tumors (NET) of pancreatic origin. The company has filed marketing applications in the EU and Switzerland for the treatment of advanced NET of gastrointestinal, lung or pancreatic origin. Afinitor is also being studied in a mid-stage study testing Afinitor plus hormonal therapy tamoxifen in patients with advanced metastatic breast cancer who have been previously treated with an aromatase inhibitor (AI). It is also under late stage trials for many cancer types, like diffuse large B cell lymphoma, tuberous sclerosis complex (TSC), gastric cancer and hepatocellular carcinoma (HCC).

Our Recommendation

Currently, we have a Neutral recommendation on Novartis. The company carries a Zacks #3 Rank (“Hold” rating) in the short run. Though pleased with Novartis’ wide range of products and its efforts to diversify further, as is evident by the acquisition of eye-care company Alcon, we prefer to remain on the sidelines due to the imminent patent cliff faced by the company.

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