2. Novartis: Going deeper into cancer drugs

Mark Fishman

2013: $9.85B
2012: $9.33B
Change: Up 5%
As a % of revenue: 17%  
Head of R&D: Mark Fishman

Over the past few months Novartis ($NVS) has been tailoring its R&D operations to better fit the dominant hub-and-spoke style of the day. But Chairman Joerg Reinhardt recently chilled any notion that the company would be cutting back significantly on its massive research budget. And Novartis needs a big research budget to fill some big holes that are being blasted on its revenue side by generic competition.

When EvaluatePharma did their evaluation of the most notable likely approvals for 2014--a lean bunch of prospects overall--Novartis came in with two of the top drugs in the late-stage pipeline. There was serelaxin for heart failure, which racked up consensus sales projections of $903 million in 2018, and the anti-IL17A drug secukinumab (AIN457) for psoriasis (worth perhaps $572 million in sales in four years). Recently the Phase III data for self-administered injections of secukinumab came in with high efficacy, which is likely to grease its tracks at regulatory agencies in the U.S. and Europe. And it's already beaten out Enbrel in a head-to-head study that wrapped up last summer.

Serelaxin, though, has all but jumped the rails. Embarrassingly, regulators in the EU have already turned thumbs down on the pharma giant's application, faulting the data package that was gathered in Phase III. And an FDA panel quickly followed suit with a unanimous "no" vote against marketing approval, leaving this drug likely dead in the water until investigators do the second Phase III study they were told ahead of time they needed.

The serelaxin debacle was an odd setback, particularly given the FDA's decision to give this therapy a breakthrough drug designation after the company held it up as a prime example of how Novartis would deal with looming generic competition to Diovan.

Novartis' research execs typically like to build their research programs for speed. In an attempt to take full advantage of the FDA's breakthrough drug program, Novartis went ahead and filed for an approval of LDK378 based on promising Phase II results for non-small cell lung cancer--which recently paid off with a fast approval. The company's aggressiveness has also been on full display with the progress it's been making on the CAR-T front after picking up rights to the CTL019 program initially developed by Carl June at the University of Pennsylvania. And in a huge swap and shop with GlaxoSmithKline ($GSK), in which it essentially traded out its vaccines portfolio for a set of marketed cancer drugs, Novartis picked up rights to Glaxo's AKT inhibitor afuresertib, which recently figured in GSK's plans to refill its late-stage pipeline after a slate of new drug approvals over the past 18 months. Novartis is also getting an opt-in on GSK's experimental cancer drugs as the U.K. pharma giant continues to pursue programs in immunotherapy, epigenetics, and tumor environment.

With a rich pipeline of new therapies to work with, Novartis also had a second late-stage heart program to turn to. LCZ696 is their new blockbuster hope for cardiology.

Already-approved Jakavi, meanwhile, is apparently racing ahead to blockbuster status, following a well-known path at Novartis in following up initial cancer approvals by expanding the franchise. Phase III cancer drugs include LBH589 (panobinostat) and LEE011 in combination with letrozole for breast cancer.

Sandoz, meanwhile, says it's been making progress on a slate of pioneering biosimilars.

For more:
Special Reports: Biopharma's Top R&D Spenders of 2012 - Novartis | Top 15 highest paid biopharma R&D chiefs - Mark Fishman
Novartis races to the FDA with its 'breakthrough' lung cancer drug
On the ropes, Novartis' cardiology team declares a blockbuster PhIII knockout

2. Novartis: Going deeper into cancer drugs
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