#5 - Novartis
Lichtstrasse 35, CH-4056
Basel (Switzerland)
Tel: (41) 61324 1111
Fax: (41) 61324 8001
www.novartis.com
| Headcount | 100,735 | |
| Year Established | 1996 | |
| Pharma Revenues | $23,532 | +16% |
| Total Revenues | $37,020 | +15% |
| Net Income | $7,202 | +17% |
| R&D Budget | $5,364 | +11% |
| Drugs Approved/Launched |
|
| Drug | Indication |
| optaflu | influenza vaccine (EU) |
| exforge | hypertension |
| lamisil | fungal infection of the scalp, pediatric |
| focetria | influenza pandemic |
| sebivo | first-line treatment for chronic hepatitis B (EU, China) |
| reclasta | Paget’s disease |
| tekturna | hypertension |
| lucentis | wet age-related macular degeneration (EU) |
| Drugs Pending Approval |
|
| Drug | Indication |
| galvus | type 2 diabetes |
| tasigna | chronic myeloid leukemia |
| comtan | Parkinson’s disease (Japan) |
| exelon patch | dementia |
| certican | prevention of organ rejection |
| mycograb | severe fungal infections |
| aclasta | Paget's disease of the bone (approved EU), osteoporosis |
| prexige | osteoarthritis, acute pain, primary dysmenorrhea |
| tyzeka | hepatitis B (EU) |
| Drugs in Phase IIb and Beyond |
|
| Drug | Indication |
| diovan | prevention of new onset type 2 diabetes, cardiovascular mortality |
| lotrel | high risk hypertension |
| ptk787 | colorectal cancer, solid tumors |
| gleevec | gioblastoma multiforme |
| epo906 | ovarian cancer, solid tumors |
| lic477 | bipolar disorder |
| ago178 | depression |
| fty720 | multiple sclerosis |
| qab149 | COPD |
| mff258 | asthma, COPD |
| zelnorm | functional dyspepsia |
| ldc300 | hepatitis B |
| albuferon | hepatitis C |
| rad001 | renal cell cancer, pancreatic tumors |
| lbh589 | cutaneous T-cell lymphoma |
| as1404 | squamous NSCLC |
| cyt002-NicQb | smoking cessation |
| som230 | Cushing’s disease |
| xyotax | NSCLC |
| pkc412 | acute myeloid leukemia |
| qab149 | asthma and COPD |
| tmb100 | cystic fibrosis |
| tfp561 | recombinant tissue factor pathway inhibitor |
| abf656 | chronic hepatitis C |
| opc759 | dry eye |
| Early Research Projects |
|
| Drug | Indication |
| crad001c2242 | colorectal cancer |
| app018 | atherosclerosis |
| lci699 | hypertension |
| lbh589 | hematological and solid tumors |
| aee788 | melanoma |
| hcd122 | CLL and multiple myeloma |
| raf265 | melanoma |
| afq056 | anxiety |
| baf312 | multiple sclerosis |
| cad106 | Alzheimer’s disease |
| rsv604 | RSV infection |
| aeb071 | psoriasis |
| rki983 | glaucoma |
| ain457 | rheumatoid arthritis |
| Drugs Coming Off Patent |
|
| Drug | Indication |
| lamisil | antifungal (June 2007) |
| Drugs Withdrawn from Market |
|
| Drug | Indication |
| zelnorm | irritable bowel syndrome (U.S.) |
| Top Selling Drugs |
|||
| Drug | Indication | Sales | (+/-%) |
| diovan | hypertension | $4,223 | +15% |
| gleevec | chronic myeloid leukemia | $2,554 | +18% |
| lotrel | hypertension | $1,352 | +26% |
| zometa | bone metastasis | $1,283 | +5% |
| lamisil group | fungal infections | $978 | -14% |
| neoral | immunosuppression | $918 | -4% |
| sandostatin group | acromegaly | $915 | +2% |
| lescol | cholesterol | $725 | -5% |
| trileptal | epilepsy | $721 | +17% |
| femara | breast cancer | $719 | +34% |
| voltaren | inflammation/pain | $690 | flat |
| zelnorm | irritable bowel syndrome | $561 | +34% |
| exelon | Alzheimer's disease | $525 | +12% |
Account for 69% of total pharma sales, down from 72% in 2005.
PROFILE
Bolstered by the $1 billion addition of a new vaccine and diagnostics unit, Novartis posted one of the biggest revenue gains in our Top 20 list, adding a total of $3.3 billion to last year's results. The boost enabled Novartis to jump from the #7 spot into our top 5, and 1Q2007 results (pharma +17% to $5.9 billion, vaccine/diagnostics +47% to $231 million) show that it's not looking back. (As was the case last year, we're not including revenues from Novartis' generic unit, Sandoz. That group posted nearly $6 billion in sales, up 27% in 2006.)
Novartis continued its diversification strategy in 2006, growing its vaccine business and getting approval for its first biogeneric (via Sandoz). The company's Consumer Health unit also received some attention for marketing a drug to treat separation anxiety in dogs. The drug, Clonicalm, is adapted from Anafranil, a human anti-anxiety treatment first marketed by Novartis predecessor Geigy back in the 1960s.
In December 2006, Novartis named a Cambridge, MA site as its vaccine and diagnostics headquarters and announced plans to begin construction of a cell culture-based vaccine facility in Holly Springs, NC in 2007. In June 2007, Novartis gained approval in the EU for Optaflu, a flu vaccine that doesn't use chicken eggs to produce viral antigens. "Optaflu marks the first major innovation in influenza vaccine manufacturing in over 50 years. This vaccine, which is based on our proprietary cell culture technology, would provide for a more flexible and reliable production process, so as to contribute to meeting the ongoing need for seasonal influenza vaccines and the potential need for influenza vaccines in the event of a pandemic," said Dr. Joerg Reinhardt, chief executive officer of Novartis Vaccines and Diagnostics. The group also received approval in May 2007 for Forcetria, a pandemic vaccine with an adjuvant technology intended to extend vaccine supply by requiring smaller doses.
Pressure Pipeline
Novartis made a splash with the March 2007 approval of Tekturna, a daily hypertension drug. Tekturna is the first in its class of direct renin inhibitors, targeting an enzyme that can contribute to high blood pressure and providing blood pressure control for 24 hours, with reduced side effects. The approval marked the first new hypertension treatment in more than a decade. It received approval in Europe in June 2007 as Rasilez
Several other companies have been pursuing renin inhibitors, including Merck and GSK, but Novartis' head start could turn into a billion-dollar lead by the time other drugs hit the market. One analyst predicted $2 billion in Tekturna sales by 2011. In May, Novartis submitted a combo-pill of Tekturna and a generic diuretic, HCT, and has other combos in trials. This should help Novartis weather the patent expiration of top-selling Diovan, expected in 2012.
|
The Lowe Down: Novartis
What’s striking about Novartis is how calm things seem over there compared to many of their peers. They’ve had the normal portions of good and bad luck, but somehow the variance just doesn’t seem as brutal. People forget that they had a COX-2 inhibitor ready to go when Vioxx imploded, for example. From one perspective, that was bad news – after all, they’d spent all that money. But it was probably better that way, since the compound never made it to market, and thus never made it as far as the tort lawyers. (Better still would have been to have had no COX-2 effort at all, but who would have known that)? They’re not a quiet company when it comes to publications and publicity, though. Their DPP-4 program was the one making all the noise in the literature, but wasn’t the first one to market after all that. And the high profile of their Cam-bridge research center has pretty much erased the memory of them as one of the big NJ pharmas. Will it eventually supplant their reputation as a big Swiss one? If the pipeline holds up, the folks in Basel might find that a reasonable trade. --Derek Lowe |
Further confusing the lifecycle, Novartis' #3 seller, Lotrel, is actually a combo of Lotensin and . . . Pfizer's Norvasc! The patent on Lotrel is supposed to expire in 2017, but Teva recently received court approval to market a generic version of Lotrel in the U.S. Novartis is suing Teva to stop the generic shipments, but is also hedging its bets by . . . selling its own generic Lotrel through Sandoz! (Cross-company combos can create confusion.)
Rough Sailing
Despite its short-term growth, Novartis hasn't had the smoothest of sailing lately. In April 2007, the company withdrew Zelnorm, a treatment for irritable bowel syndrome (IBS), from the U.S. market. New analysis of 29 clinical trials revealed a slight increase in risk for heart attack, stroke or severe chest pain. Zelnorm racked up $561 million in 2006 sales (+34%), so its recall will put a dent in the company's 2007 results.
In June 2006, Novartis acquired NeuTec, a Manchester, UK-based biopharma with unique antibody-based treatments for life-threatening infections. Novartis paid $569 million for Neutec, only to see its lead product, Mycograb, get rejected by committee in the EU.
For what it's worth, the "negative opinion" was a result of manufacturing issues, not a question of efficacy. Mycograb's manufacture was handled by a third party, and Novartis is working to get these CMC issues solved and appeal the ruling by CHMP. Mycograb is intended to treat invasive candidiasis, a fungal infection.
No word on whether that acquisition -- minor by large pharma standards -- is what led chief executive officer Dan Vasella, M.D. to say, "[P]atience pays off, because an acquiring company runs the risk of paying too much if it acts too agitated," in an interview with Swiss paper Le Temps.
Novartis' biggest headache is the ongoing application for diabetes drug Galvus. The FDA accepted the NDA for Galvus, a DPP-4 inhibitor, in January 2006, but has yet to gain approval. Novartis received an approvable letter from the FDA in February 2007, requesting a trial to demonstrate safety and efficacy in patients with kidney impairment. Meanwhile, Galvus competitor Januvia (from Merck) is on the market and racking up new prescriptions, and Bristol-Myers Squibb and AstraZeneca are in mid-stage development of their own DPP-4 inhibitors.
At the June 2007 American Diabetes Association annual meeting, a Novartis spokesman commented that the company expects a decision from the EU on Galvus by the end of this year, but that conversations with the FDA were ongoing. The company projects $1.0-$1.5 billion in annual sales from Galvus, and hopes for a U.S. release by the end of 2008, once the company allays the FDA's concerns over high-dose primate tests that resulted to skin lesions.
Novartis faces plenty of challenges. It's in position to prolong its hypertension franchise through the next decade, but its diabetes challenger may fall short. It's making plenty of headway in vaccines, but that's long been regarded as a lower-margin activity (even if it is starting to catch up to therapeutic drugs). It's poised to challenge the status quo in biogenerics with its Sandoz unit, but that may create a "follow-on arms race" that decimates the higher end of the biologics market. As Dr. Vasella put it in his letter to shareholders, "Business as usual is no longer a viable long-term option."
For the full profile, including pipeline and patent information, download the PDF.
