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Novartis' (NVS) MS Drug Gilenya Positive in Long-Term Study

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Novartis AG (NVS - Free Report) announced positive top-line results from the phase III study, PARADIGMS. The study evaluated the safety and efficacy of oral once-daily Gilenya in children and adolescents (aged 10-17) with multiple sclerosis (MS).

The flexible duration (up to two years), double-blind, randomized, multi-center study is being conducted to evaluate the safety and efficacy of oral Gilenya compared to interferon beta-1a in children and adolescents with a confirmed diagnosis of MS which will be followed by a five-year open label extension phase. Patients enroled in the study were randomized to receive once-daily oral Gilenya (0.5 mg or 0.25 mg, dependent on patients' body weight) or intramuscular interferon beta-1a once weekly.

The study met its primary endpoint, showing a significant reduction in relapses with Gilenya versus interferon beta-1a. The results of the study showed that oral Gilenya resulted in a significant and clinically meaningful reduction in the number of relapses (annualized relapse rate) in patients over a period of up to two years, compared to interferon beta-1a intramuscular injections.

We note that Gilenya is already approved in the United States for the first-line treatment of relapsing forms of MS in adults and in Europe for adult patients with highly-active relapsing-remitting MS (RRMS).

The drug generated sales of $837 million in the first half of 2017, up 5% from the year-ago period. 

The drug is not yet approved for treatment of pediatric MS. Novartis plans to complete a thorough analysis of these important data and discuss the same with health authorities to agree on next steps for submission.

We note that Biogen, Inc. (BIIB - Free Report) holds a strong position in the MS market with a wide range of products including Avonex, Tysabri, Tecfidera and Plegridy.

Apart from  Gilenya, Novartis' MS portfolio includes Extavia (interferon beta-1b for subcutaneous injection) which is approved for the treatment of relapsing forms of MS along with other pipeline candidates like BAF312 (siponimod) and OMB157 (ofatumumab), a fully human monoclonal antibody under investigation in relapsing MS. Novartis’ generic division, Sandoz, markets Glatopa (glatiramer acetate injection) 20mg/mL, the first generic version of Teva Pharmaceutical Industries Ltd.’s (TEVA - Free Report) Copaxone 20mg.

Going forward, we expect that the approval of new drugs and label expansion of existing ones will bode well for Novartis even though stiff generic competition for key drugs like Gleevec continues to act as a major deterrent.

Novartis stock has rallied 15.0% year to date compared with the industry’s 11.7% gain.

Last week, Novartis got a boost when the FDA has approved its breakthrough gene transfer treatment, Kymriah (tisagenlecleucel) suspension for the treatment of patients up to 25 years of age with B-cell precursor acute lymphoblastic leukemia (ALL). The approval opens up new frontiers in the treatment of cancer by advancing immunocellular therapy for children and young adults with r/r B-cell ALL which comprises approximately 25% of cancer diagnoses among children under 15 years and is the most common cause of childhood cancer in the United States. 

Zacks Rank & Key Pick

Novartis currently carries a Zacks Rank #3 (Hold).

A better-ranked stock in the healthcare sector is Aduro Biotech, Inc. which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Aduro Biotech’s loss per share estimates narrowed from $1.44 to $1.32 for 2017 and from $1.33 to $1.24 for 2018 over the last 30 days. The company delivered positive surprises in two of the trailing four quarters with an average beat of 2.53%.

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