We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Novartis (NVS) Entresto Patent Faces Setback, Stock Down
Read MoreHide Full Article
Novartis (NVS - Free Report) recently received an unfavorable ruling from the U.S. District Court for the District of Delaware regarding the validity of a patent covering its flagship product, Entresto.
This patent, which includes the combination of sacubitril and valsartan, is set to expire in 2025 with its pediatric exclusivity. Despite the unfavorable ruling, Novartis firmly believes in the validity of the combination patent and intends to appeal the decision to the U.S. Court of Appeals for the Federal Circuit in the hopes of overturning the ruling. The U.S. District Court for the District of Delaware issued a negative decision regarding the validity of U.S. Patent No. 8,101,659, one of the patents listed in the Orange Book for Entresto.
Consequently, shares were down on Jul 7 as investors were concerned about potential competition from generic entrants in the market.
Presently, no generic versions of Entresto have received tentative or final approval from the FDA. This means that any launch of generic Entresto products before the final outcome of Novartis' appeal or any other ongoing patent infringement litigations may face the risk of subsequent legal developments.
Despite this setback, Novartis maintains confidence in its growth and profitability outlook for both the short and mid-term on the back of the growth potential of its other key brands, including Kisqali, Pluvicto, Leqvio, Kesimpta, Scemblix and iptacopan.
Novartis reiterated its full-year 2023 group guidance despite the potential entry of generic Entresto products in the United States earlier than expected.
Total sales are projected to grow in mid-single digits, while core operating income is projected to grow in the high-single digits. Furthermore, Novartis maintains its mid-term sales growth outlook at 4% compound annual growth rate from 2022 to 2027, with a target core operating income margin of 40% for Novartis, excluding its subsidiary Sandoz.
Novartis remains committed to its focused growth strategy, which centers around in-market and launch brands, as well as a robust pipeline of high-value innovative medicines.
Novartis has been actively engaged in litigation since 2019 with various abbreviated new drug application filings seeking approval to market generic versions of Entresto. Multiple Orange Book-listed patents provide protection to Entresto until as late as 2036, with expiration dates ranging from 2023 to 2036.
On Jul 6, 2023, the U.S. District Court for the Northern District of West Virginia issued a decision that the proposed generic Entresto products from Mylan Pharmaceuticals Inc. will infringe U.S. Patent Nos. 8,877,938 and 9,388,134.
Shares of Novartis have gained 4.4% in the year so far against the industry’s 2% decline.
Image Source: Zacks Investment Research
Novartis’ performance in the first quarter was better than expected, with earnings and sales beating estimates. While the older drugs face generic competition, the continued strong performance of Entresto, Pluvicto, Kesimpta and Kisqali furled growth. Pluvicto and Scemblix saw strong launches and recorded solid sales. Demand for Pluvicto continues to exceed supply in the United States. The Leqvio launch continues to progress well.
However, with Entresto now facing challenges, it remains to be seen how the company will achieve the set targets. Sales of Entresto came in at $1.4 billion in the first quarter of 2023.
The company recently decided to divest its “front of eye” ophthalmology assets to Bausch + Lomb (BLCO - Free Report) , a global eye health company.
Xiidra, the first approved prescription treatment for dry eye disease, and SAF312, a first-in-class therapy for chronic ocular surface pain, are pivotal assets included in the transaction. Novartis has signed an agreement with Bausch + Lomb to transfer Xiidra and SAF312 (libvatrep) for $2.5 billion.
Zacks Rank and Stocks to Consider
Novartis currently carries a Zacks Rank #3 (Hold).
Over the past 30 days, earnings estimates for LGND have increased by $1.09 to $5.25. LGND topped earnings estimates in two of the last four quarters and missed in the remaining two, the average surprise being 21.50%.
Over the past 60 days, earnings estimates for ABBV have increased by 3 cents to $10.99 for 2023. ABBV surpassed estimates in all the trailing four quarters, the average surprise being 1.78%.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Novartis (NVS) Entresto Patent Faces Setback, Stock Down
Novartis (NVS - Free Report) recently received an unfavorable ruling from the U.S. District Court for the District of Delaware regarding the validity of a patent covering its flagship product, Entresto.
This patent, which includes the combination of sacubitril and valsartan, is set to expire in 2025 with its pediatric exclusivity. Despite the unfavorable ruling, Novartis firmly believes in the validity of the combination patent and intends to appeal the decision to the U.S. Court of Appeals for the Federal Circuit in the hopes of overturning the ruling. The U.S. District Court for the District of Delaware issued a negative decision regarding the validity of U.S. Patent No. 8,101,659, one of the patents listed in the Orange Book for Entresto.
Consequently, shares were down on Jul 7 as investors were concerned about potential competition from generic entrants in the market.
Presently, no generic versions of Entresto have received tentative or final approval from the FDA. This means that any launch of generic Entresto products before the final outcome of Novartis' appeal or any other ongoing patent infringement litigations may face the risk of subsequent legal developments.
Despite this setback, Novartis maintains confidence in its growth and profitability outlook for both the short and mid-term on the back of the growth potential of its other key brands, including Kisqali, Pluvicto, Leqvio, Kesimpta, Scemblix and iptacopan.
Novartis reiterated its full-year 2023 group guidance despite the potential entry of generic Entresto products in the United States earlier than expected.
Total sales are projected to grow in mid-single digits, while core operating income is projected to grow in the high-single digits. Furthermore, Novartis maintains its mid-term sales growth outlook at 4% compound annual growth rate from 2022 to 2027, with a target core operating income margin of 40% for Novartis, excluding its subsidiary Sandoz.
Novartis remains committed to its focused growth strategy, which centers around in-market and launch brands, as well as a robust pipeline of high-value innovative medicines.
Novartis has been actively engaged in litigation since 2019 with various abbreviated new drug application filings seeking approval to market generic versions of Entresto. Multiple Orange Book-listed patents provide protection to Entresto until as late as 2036, with expiration dates ranging from 2023 to 2036.
On Jul 6, 2023, the U.S. District Court for the Northern District of West Virginia issued a decision that the proposed generic Entresto products from Mylan Pharmaceuticals Inc. will infringe U.S. Patent Nos. 8,877,938 and 9,388,134.
Shares of Novartis have gained 4.4% in the year so far against the industry’s 2% decline.
Image Source: Zacks Investment Research
Novartis’ performance in the first quarter was better than expected, with earnings and sales beating estimates. While the older drugs face generic competition, the continued strong performance of Entresto, Pluvicto, Kesimpta and Kisqali furled growth. Pluvicto and Scemblix saw strong launches and recorded solid sales. Demand for Pluvicto continues to exceed supply in the United States. The Leqvio launch continues to progress well.
However, with Entresto now facing challenges, it remains to be seen how the company will achieve the set targets. Sales of Entresto came in at $1.4 billion in the first quarter of 2023.
The company recently decided to divest its “front of eye” ophthalmology assets to Bausch + Lomb (BLCO - Free Report) , a global eye health company.
Xiidra, the first approved prescription treatment for dry eye disease, and SAF312, a first-in-class therapy for chronic ocular surface pain, are pivotal assets included in the transaction. Novartis has signed an agreement with Bausch + Lomb to transfer Xiidra and SAF312 (libvatrep) for $2.5 billion.
Zacks Rank and Stocks to Consider
Novartis currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the healthcare sector are Ligand Pharmaceuticals (LGND - Free Report) and AbbVie (ABBV - Free Report) . While Ligand currently sports a Zacks Rank #1 (Strong Buy), AbbVie carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 30 days, earnings estimates for LGND have increased by $1.09 to $5.25. LGND topped earnings estimates in two of the last four quarters and missed in the remaining two, the average surprise being 21.50%.
Over the past 60 days, earnings estimates for ABBV have increased by 3 cents to $10.99 for 2023. ABBV surpassed estimates in all the trailing four quarters, the average surprise being 1.78%.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.