Novartis AG (NVS) recently announced new long-term data from an extended phase III head-to-head TRANSFORMS study, which evaluated its multiple sclerosis (MS) candidate Gilenya (fingolimod). The data was presented at the 22nd Annual Meeting of the European Neurological Society in Czechoslovakia.

Gilenya is the only oral therapy approved treating patients suffering from relapsing forms of MS. Data from the TRANSFORMS study revealed reductions in relapses and MRI measures in patients who shifted from Biogen Idec Inc.‘s (BIIB) MS drug Avonex to Gilenya in the extended phase. Data also revealed that the drug was safe and well-tolerated.

Data further demonstrated that patients continuously treated with Gilenya for up to 4.5 years experienced sustained reduction in relapses and rate of brain volume loss. Novartis mentioned that as of February 2012 approximately 36,000 patients were treated with Gilenya in clinical trials and in the post-marketing setting.

Novartis is working with the European Medicines Agency (EMA) and the US Food and Drug Administration (FDA) on the benefit and risk profile of the drug. Notably, a patient died within 24 hours of taking the first dose of Gilenya in November 2011. Consequently, a Drug Safety Communication (DSC) was issued by the FDA in December 2011.

In May 2012, the FDA completed its evaluation of the matter. The regulatory body could not conclude if the drug was responsible for the death of the patient. The FDA is, however, concerned about the cardiovascular effects of Gilenya. As a result, the FDA has advised patients not to take Gilenya in case of certain adverse events.

Our Recommendation

Though we are pleased with Novartis’ wide range of products and its efforts to diversify further, we prefer to remain on the sidelines in the long term. We remain concerned about the patent expirations of key drugs like Femara and Diovan. Thus, we have a Neutral recommendation on Novartis. Novartis carries a Zacks #4 Rank (Sell rating) in the short run.

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