(NVS) Novartis Neuroendocrine Tumors Drug Cleared in European Union

Novartis’(NVS) drug Afinitor was recently approved in the European Union (EU) for the treatment of patients with advanced neuroendocrine tumors (NET) of pancreatic origin with progressive disease. The drug is already approved in the US for the indication.

The approval was based on the RADIANT-3 trial which demonstrated that Afinitor led to a statistically significant improvement in progression-free survival versus placebo. The number of months of survival without the disease progressing was 11 months for a patient treated with Afinitor versus 4.6 months for a patient on placebo.

Afinitor is currently marketed for the treatment of advanced renal cell carcinoma (kidney cancer) after an anti-VEGF therapy like Roche’s (RHHBY) Avastin, Pfizer’s (PFE) Sutent or Onyx Pharmaceuticals’(ONXX) Nexavar in the US and EU. In June this year, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) recommended approval of Afinitor for the treatment of subependymal giant cell astrocytomas (SEGA), a benign brain tumor associated with tuberous sclerosis (TS) in the EU. The drug will be marketed in the EU in the trade name of Votubia. It is already marketed in the US as Afinitor for the disease.

Afinitor is also being studied in a mid-stage study testing Afinitor plus hormonal therapy tamoxifen in patients with advanced metastatic breast cancer who have been previously treated with an aromatase inhibitor (AI). It is also under late stage trials for many cancer types, like diffuse large B cell lymphoma, tuberous sclerosis complex (TSC), gastric cancer and hepatocellular carcinoma (HCC).

Novartis is banking on new drug approvals and successful label expansions to overcome the adverse impact of the upcoming patent cliff. Label expansions like Afinitor’s offer significant tailwinds to the company’s top line.

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 due to the imminent patent cliff faced by the company.

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