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Novartis' Acute Heart Failure Drug Fails in Late-Stage Study

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Novartis AG (NVS - Free Report) recently suffered a setback on the announcement of disappointing data from a phase III study, RELAX-AHF-2, on pipeline candidate serelaxin (RLX030).

A look at Novartis’ share price movement over the past one year shows that the stock has underperformed the Zacks classified Large Cap Pharma industry. Specifically, Novartis’ stock gained 0.4% during this period, while the industry gained 6.8%.

The study evaluated the efficacy, safety and tolerability of RLX030 when used to treat patients with acute heart failure (AHF). 

RELAX-AHF-2 did not meet its primary endpoints of reduction in cardiovascular death through day 180 or reduced worsening heart failure through day five.

The study was initiated in Oct 2013. The successful development of the drug would have boosted Novartis’ cardiovascular portfolio significantly.

Novartis’ cardiovascular portfolio consists of Entresto and another candidate in pipeline ACZ885 (canakinumab). Entresto has been given a Class I recommendation in the United States and European Union clinical guidelines for treatment of heart failure with reduced ejection fraction (HFrEF). Meanwhile, ACZ885 (canakinumab) is currently being evalauted in patients who have suffered a heart attack previously as well as a high degree of vascular inflammation.

The candidate is currently in a phase III trial, CANTOS, which is evaluating if it can reduce the risk of stroke, heart attack or death. Data is expected sometime this year.

Concurrently, Novartis also announced new data on psoriasis drug Cosentyx which indicated that the drug can modify the course of moderate-to-severe psoriasis leading to long-term treatment-free skin clearance.

We remind investors that Novartis broadened its oncology portfolio by acquiring GlaxoSmithKline plc’s (GSK - Free Report) certain oncology products and pipeline compounds in Mar 2015 after having divested its Animal Health Division to Eli Lilly and Company (LLY - Free Report) . In Oct 2015, it acquired a portfolio of cancer immunotherapies through the acquisition of Admune Therapeutics and added bispecific antibodies through a collaboration with Xencor, Inc. (XNCR - Free Report) in Jun 2016.

Going forward, we expect approval of new drugs and label expansion of existing ones to bode well for Novartis. Also, strong performance of growth products should be able to offset the impact of generic competition for Gleevec.

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.

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