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Novartis (NVS) Announces Acceptance of Humira BLA by the FDA

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Novartis AG (NVS - Free Report) generic arm, Sandoz announced that the FDA accepted its Biologics License Application (BLA) for the proposed biosimilar of AbbVie, Inc. (ABBV - Free Report) Humira.

The biosimilar was submitted under the 351 (k) pathway.

The drug is already approved for the treatment of a number of inflammatory diseases including rheumatoid arthritis, plaque psoriasis, Crohn's disease and ulcerative colitis.

The data package submitted to the FDA comprises analytical, preclinical and clinical data and is expected to demonstrate that Sandoz proposed biosimilar adalimumab matches the reference biologic in terms of safety, efficacy and quality. It also included a pharmacokinetic study in healthy volunteers and a phase III confirmatory safety and efficacy study in patients with moderate to severe chronic plaque-type psoriasis.

 

 

Novartis’ stock has rallied 4% in the past one year compared with the industry’s 9.1% gain.

The biosimilar version of Humira is also under review in the EU. We note Sandoz holds a leading position in the biosimilars space with a portfolio of five marketed biosimilars currently and a deep pipeline.

The biosimilar version of rituximab, Rixathon, was approved by the European Commission in June 2017. It is currently under review in the United States.

Meanwhile, Sandoz witnessed strong growth outside the United States buoyed by launches of Rixathon and Erelzi, the biosimilars of Amgen, Inc.’s (AMGN - Free Report) Enbrel in Europe. However, pricing pressure intensified in the United States.  The company expects low single-digit sales decline at Sandoz in the fourth quarter, mainly due to seasonal shipment phasing and continued pricing pressures in the United States.

Meanwhile, Novartis is mulling strategic options for Alcon which includes retaining the business separation via capital market transactions such as a spin-off or an initial public offering. The company believes that the Alcon division has revived well for now even though a separation via capital markets will create value for shareholders. 

On the other hand, Novartis has a strong oncology portfolio of drugs like Afinitor, Exjade, Jakavi, Zykadia, Tasigna, Jadenu, and Kisqali. The recent approval of Kymriah for acute lymphoblastic leukemia is a major boost for Novartis given the potential in the CAR-T therapy space.

Zacks Rank & Key Pick

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

A better-ranked stock in the healthcare sector is Exelixis, Inc. (EXEL - Free Report) with a Zacks Rank #1 (Strong buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Exelixis’ earnings per share estimates have moved up from 72 cents to 73 cents for 2018 over the last 60 days. The company delivered a positive earnings surprise in the last four quarters, with an average beat of 572.92%.

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