Thursday, January 26, 2012

Signifor: Novartis Drugs Backed by CHMP

By: Zacks Equity Research

Novartis (NVS) recently announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) rendered positive opinion for two of its drugs.

First, the CHMP gave a positive opinion to update the label of its marketed drug Gleevec for extended use of adjuvant treatment for three years in patients with KIT (CD117)-positive gastrointestinal stromal tumors (GIST) versus the standard one-year treatment currently approved.

Secondly, the CHMP issued a positive opinion on Novartis’ pipeline candidate Signifor (SOM230) for the treatment of Cushing's disease, for which no medicines are currently available in the European Union (EU).

The positive opinion on Gleevec was based on data from a large phase III trial (n=400) which demonstrated that Gleevec led to significant improvement in both recurrence-free survival and overall survival after three years of adjuvant treatment in patients with KIT (CD117)-positive GIST versus the standard one-year treatment currently approved.

This is the first-ever study demonstrating the survival benefits of longer-term treatment with Gleevec. Novartis is also seeking approval for a Gleevec label update in the US and has been granted priority review by the US Food & Drug Administration (FDA). Besides GIST, Gleevec is currently marketed for the treatment of Philadelphia chromosome-positive chronic myeloid leukemia (Ph+CML).

The Signifor positive opinion was based on data from a phase III trial in which the candidate demonstrated significant efficacy in reducing the level of urinary free cortisol (UFC). In the US, Novartis filed a new drug application (NDA) in June 2011 for Cushing's disease which was subsequently withdrawn due to some problem in the chemistry, manufacturing and controls (CMC) section.

The NDA will be resubmitted following discussion with the FDA. Other than Cushing's disease, Signifor is also being studied for the treatment of acromegaly and carcinoid syndrome in phase III trials.

Earlier this month, Novartis also announced that its drug Lucentis has been approved in China for the treatment of wet age-related macular degeneration (wet AMD). Lucentis is currently marketed for wet AMD as well as visual impairment due to diabetic macular edema (DME) and macular edema following retinal vein occlusion (RVO) in many countries including the US and EU. Novartis’ diabetes drug, Galvus, was also launched in China recently as an add-on to metformin, the standard of care.

Our Recommendation

Currently, we have a Neutral recommendation on Novartis. The company carries a Zacks #3 Rank (Hold rating) in the short run. Though pleased with Novartis’ wide range of products and its efforts to diversify further, as is evident by the acquisition of eye-care company Alcon, we prefer to remain on the sidelines in the long term due to the imminent patent cliff faced by the company.

Read the full analyst report on NVS