Novartis (NVS - Analyst Report) recently suffered a setback when the Indian Supreme Court denied patent for the company’s oncology drug, Glivec (imatinib mesylate) under the Indian patent law.
Novartis filed the case to seek a patent for Glivec. It also sought clarification on certain aspects of the patent law. Novartis has never been granted an original patent for Glivec in India.
The Supreme Court in India denied Novartis’ appeal challenging the rejection of a patent for Glivec. The ruling by the Indian Supreme Court will discourage further innovative drug discovery by Novartis in India.
We remind investors that in 2009, Novartis filed a Special Leave Petition with the Indian Supreme Court thereby challenging the denial of the Glivec beta crystal form patent on two grounds, based on Sections 3(d) and 3(b) of the Indian patent law.
We note that Glivec is indicated for some forms of chronic myeloid leukemia (CML) and gastrointestinal stromal tumors (GIST). Launched in 2001, Glivec is now patented in almost 40 countries including China, Russia and Taiwan.
Glivec is one of the leading selling oncology drugs in Novartis’ portfolio. Glivec reported sales of $4.7 billion in 2012, up 4% year over year driven by solid demand for treating adults suffering from metastatic and/or unresectable KIT+ gastrointestinal stromal tumors (GIST).
The year-over-year sales growth was also driven by Glivec’s use as an adjuvant treatment for certain adult patients following resection of KIT+ GIST and as a targeted therapy for Philadelphia chromosome-positive chronic myeloid leukemia (Ph+ CML).
Novartis carries a Zacks Rank #4 (Sell). Pharma companies that currently look better-positioned include Abbott Laboratories (ABT - Analyst Report), Furiex Pharmaceuticals and Novo Nordisk (NVO - Analyst Report). All three are Zacks Rank #2 (Buy) stocks.