Novartis (NVS) received a pipeline setback recently with the US Food and Drug Administration (FDA) requesting additional clinical data on its pipeline candidate ACZ885 for the treatment of patients suffering from severe gouty arthritis, commonly known as gout.
The FDA issued a complete response letter to the Swiss pharma giant as it was dissatisfied with the benefit risk profile in refractory patients and requested more data to evaluate the same.
We remind investors that in June this year, an advisory committee of the FDA, though satisfied with the overall efficacy of ACZ885, did not recommend approval of the drug for the proposed indication. They suggested that the drug should be used on a smaller population of gouty arthritic patients. Novartis plans to work closely with the FDA on the issue.
Novartis had filed a regulatory application in the US in February 2011. Novartis has also submitted regulatory applications for the candidate in the European Union, Canada and Switzerland. The regulatory applications were based on positive data from two late stage trials of ACZ885.
The data showed that ACZ885 was more effective in reducing pain in patients than an injectable steroid used for treating gouty arthritis attacks. ACZ885 also reduced the risk of new attacks by 68% compared to steroids.
Gouty arthritis is the most common form of inflammatory arthritis in adults and affects roughly 1-4% of the adult populace. It leads to severe pain which can last for a week or more. There is significant unmet need for the treatment of gouty arthritis as the currently available options like non-steroidal anti-inflammatory drugs (NSAIDs) or colchicine may be unsuitable for patients who have coexisting medical problems.
Novartis is banking on new drug approvals and successful label expansions to overcome the adverse impact of the upcoming patent cliff. Pipeline setbacks like these can be a body blow for the company.
ACZ885 is currently marketed for the treatment of cryopyrin-associated periodic syndromes (CAPS) under the trade name Ilaris. In Japan, however, the drug is under review for this indication.
The company is also looking to expand the use of the candidate and is currently conducting studies for several additional indications. Novartis is studying ACZ885 for type II diabetes in mid-stage trials. The company is also studying the candidate for the treatment of systemic juvenile idiopathic arthritis (SJIA), the most severe form of arthritis in children. A late stage trial for SJIA met the primary end-point and a second pivotal study is currently in progress. Novartis also plans to start a late stage trial in secondary prevention of cardiovascular events.
Our Recommendation
Currently, we have a Neutral recommendation on Novartis. The recommendation is supported by a Zacks #3 Rank (short-term Hold rating). Though pleased with Novartis’ wide range of products and its efforts to diversify further, as is evident from 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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