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Novartis (NVS) Gets FDA Nod for Label Expansion of Promacta

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Novartis AG (NVS - Free Report) announced that the FDA has expanded the label of Promacta (eltrombopag) to include first-line treatment for adults and pediatric patients aged two years and older with severe aplastic anemia (SAA), in combination with standard immunosuppressive therapy (IST).

We note that the drug is already approved for SAA for patients who have had an insufficient response to IST.

The drug is marketed as Revolade in most countries outside the United States. Promacta is already approved for adults and children with chronic immune thrombocytopenia (ITP) who are refractory to other treatments, and for the treatment of thrombocytopenia in patients with chronic hepatitis C virus (HCV) infection.

The approval was based on encouraging results from a study sponsored by the National Heart, Lung and Blood Institute (NHLBI) Division of Intramural Research Program and conducted under a Cooperative Research and Development Agreement (CRADA).

In addition, Novartis submitted a type II variation application for Revolade as a first-line SAA treatment to the European Medicines Agency in April 2018. A decision is expected in 2019.

Moreover, the FDA also granted Promacta Breakthrough Therapy designation as a counter measure for hematopoietic sub-syndrome of acute radiation syndrome (H-ARS).

Concurrently, Novartis announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has adopted a positive opinion for the label expansion of breast cancer drug Kisqali.

The CHMP recommended Kisqali for the treatment of women with hormone receptor positive, human epidermal growth factor receptor-2 negative (HR+/HER2-) locally advanced or metastatic breast cancer in combination with AstraZeneca’s (AZN - Free Report) Faslodex as initial endocrine-based therapy, and for women who have received prior endocrine therapy.

The positive opinion also recommended approval of Kisqali in combination with endocrine therapy and a luteinising hormone-release hormone agonist (LHRH) for pre- and perimenopausal women.

Approval of new drugs and label expansion of existing drugs bode well for Novartis whose key drugs are facing generic competition.

The company’s shares have gained 8.3% in the year so far compared with the industry’s growth of 11.5%.

 

Of late, Novartis is redirecting its focus to its core areas of growth. Earlier, the company announced that it intends to spin-off its ophthalmology division, Alcon, into a separately-traded standalone company to grow as a medicines company solely.

The Alcon business was not performing per management’s expectations. Although it did witness some recovery, the company decided to spin-off the same to focus better on its legacy drug business. The company also exited its antibacterial business. Earlier, Novartis had divested its stake in the OTC joint venture with GlaxoSmithKline (GSK - Free Report) for $13 billion.

Zacks Rank & Key Pick

Novartis carries a Zacks Rank #3 (Hold). A better-ranked stock in the healthcare sector is Gilead Sciences, Inc. (GILD - Free Report) , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Gilead’s earnings per share estimates increased from $6.58 to $6.87 for 2018 over the past 60 days. Estimates for 2019 are also up by 27 cents.

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