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Novartis (NVS) Receives EC Approval for Neulasta Biosimilar

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Novartis AG (NVS - Free Report) announced that the European Commission (EC) granted marketing authorization to Ziextenzo, the biosimilar of Amgen’s (AMGN - Free Report) Neulasta.

The biosimilar has been approved for all the indications of the branded drug. Ziextenzo is indicated to reduce the duration of neutropenia and incidence of febrile neutropenia in adult patients treated with cytotoxic (anti-cancer) chemotherapy for malignancy, with the exception of chronic myeloid leukemia and myelodysplastic syndromes.

Novartis is making efforts to expand its biosimilars portfolio. Novartis’ generic arm, Sandoz, is a leader in biosimilars with eight approved biosimilars worldwide, including five in the last eighteen months.

Sandoz is a strong player in the biosimilars market with quite a few marketed biosimilars like Omnitrope, a human growth hormone; Binocrit, an erythropoiesis-stimulating agent used to treat anemia; and filgrastim for neutropenia under the brand names Zarzio outside the United States and Zarxio in the United States. A biosimilar version of Rituxan (rituximab) was approved by the EC in June 2017 (marketed as Rixathon).

In August 2016, Sandoz’s Erelzi, a biosimilar version of Amgen’s blockbuster drug Enbrel, gained approval in the United States for five indications. Erelzi was also approved by the EC in 2017. Sandoz also obtained approval for Zessly, a biosimilar version of Johnson & Johnson’s Remicade, in Europe. The FDA also approved Hyrimoz, the biosimilar of Humira.

Concurrently, Alcon, the eye-care division of Novartis, held its first Capital Markets Day for investors and analysts. Alcon is a global leader in the highly attractive and growing $23-billion eye-care devices market.

The company’s shares have gained 9.7% in the year compared with the industry’s 11% growth.

 

Novartis intends to spin-off Alcon into a separately-traded standalone company to grow as a medicines company solely and focus better on its legacy drug business. Novartis acquired Alcon in 2011. The business then comprised surgical, vision care and ophthalmic pharmaceuticals.

In January 2016, Novartis undertook a strategic review of its business and consequently transferred Alcon's ophthalmic pharmaceuticals to the Novartis Innovative Medicines division. The transaction is expected to be tax neutral for Novartis.

The spin-off is expected to be completed in the first half of 2019, subject to general market conditions, tax rulings and opinions, final Board endorsement, and shareholder approval at the AGM in February 2019. Alcon has filed an initial Form 20-F registration statement with the Securities and Exchange Commission (SEC). An application will be made to list the shares in Alcon on the SIX Swiss Exchange (SIX) and the New York Stock Exchange (NYSE) under the ticker symbol "ALC."

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 $6.60 to $6.91 for 2018 over the past 60 days. Estimates for 2019 are also up by 30 cents.

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