Strategic Priority Progress 2013
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A new wave of innovation, productivity, and growth is helping Novartis move past significant patent expirations into the next phase of growth for the company.
Novartis capitalized on strong momentum from innovation, growth and productivity throughout 2012 in an effort to offset patent expirations to some of its best-selling medicines, including the Diovan franchise. As a result, the next growth phase for Novartis started during 2013. Management expected 2013 sales to generate low-single-digit growth versus the 2012 performance after absorbing the effect of generic competition that could total $3.5 billion. For 2014 and 2015, Novartis leaders anticipate sales growth of at least mid-single digits with core operating income growing ahead of sales.
Novartis secured 17 major approvals during 2012, including Afinitor in advanced breast cancer in the United States and European Union; Jakavi for myelofibrosis in the European Union; and Dailies Total 1 in the United States. Additionally, the breakthrough meningococcal serogroup B vaccine Bexsero was recommended for EU marketing clearance during the fourth quarter. Novartis sales of “Recently launched products” improved 13 percent to $16.3 billion, accounting for 29 percent of Group net sales in 2012. Also during the year, Gilenya attained blockbuster status with $1.2 billion in sales. Novartis provided medical care for 1.2 billion patients globally in 2012 – topping the record-setting level of prior years – due to recently launched products and the continued expansion in fast-growing markets. For 2013-2014, Novartis anticipates 24 pivotal study readouts and up to 20 product filings and 18 potential approvals in just the Pharmaceuticals segment.
Novartis is the only healthcare company worldwide with leading positions in pharmaceuticals, eye care, generics, vaccines and diagnostics, over-the-counter medicines, and animal health. Company management intends to take advantage of promising opportunities across these segments while mitigating risks and challenges in any one business area. Novartis leaders say the success of this strategy necessitates a consistent focus on three core priorities: innovation to meet the evolving needs of patients across the healthcare spectrum; growth from the rejuvenation of the Group portfolio and expansion in new and emerging markets; and productivity to invest for the future and increase returns to shareholders. In each of these areas – innovation, growth and productivity – Novartis made important advances during 2012 and 2013.
“Novartis delivered a solid second quarter, resulting in a good first half in 2013,” noted company CEO Joseph Jimenez. “Successful execution on growth brands allowed us to navigate patent expiries and new competition, while deepening our footprint in Emerging Growth Markets like China and Russia. Our underlying business showed strong growth behind significant innovation, with sales up 8 percent and core operating income up 17 percent in constant currencies in the first half excluding the impact of generics.”
2013 marked the end of the Daniel Vasella era when he stepped down as chairman. Dr. Vasella had ceded his previous CEO title to Mr. Jimenez effective Jan. 31, 2010. Dr. Vasella acted as CEO and an executive member of the board of directors for 14 years following the merger that established Novartis during 1996. He was named chairman during April 1999.
During Dr. Vasella’s reign, Novartis transformed from a chemical and pharmaceutical group into a pure healthcare company. Healthcare revenue grew from $16.79 billion in 1996 (with total sales including chemicals amounting to $29.22 billion) to $56.67 billion during 2012. From 1996 through 2011, Novartis received more product approvals for new molecular entities in the United States and Europe than its competitors. From 2011 into 2013, Novartis is the industry leader in R&D expenditure.
Company performance
Novartis Group net sales for 2012 totaled $56.67 billion, down 3 percent in U.S. dollars and representing flat growth in constant currencies compared to 2011. The negative impact of three percentage points was due to the strengthening of the dollar against most currencies. Group operating income for 2012 totaled $11.51 billion, advancing 5 percent in U.S. dollars and 8 percent in constant currencies versus 2011. Group core operating income decreased to $15.16 billion, down 5 percent in U.S. dollars and 2 percent in constant currencies. Group net income amounted to $9.62 billion, improving 4 percent in U.S. dollars and 7 percent in constant currencies over 2011, in line with operating income. Core net income for 2012 dropped 5 percent (-3 percent in constant currencies) to $12.81 billion, in line with core operating income. Basic earnings per share rose 3 percent (-6 percent in constant currencies) versus the 2011 result to $3.93. Core EPS was down 6 percent (-3 percent cc) to $5.25 for 2012.
Novartis Pharmaceuticals produced 2012 net sales of $32.15 billion, down 1 percent in U.S. dollars but up 2 percent in constant currencies. This performance was spurred by volume growth of eight percentage points, more than offsetting the negative impact of generic competition totaling $1.9 billion (-6 percentage points). Pricing resulted in a slightly negative impact for 2012. Products launched since 2007 advanced 28 percent in constant currencies and contributed $11.4 billion or 35 percent of total net sales for the Pharmaceuticals segment versus 28 percent during 2011.
Alcon net sales in 2012 advanced 3 percent (+5 percent cc) to $10.23 billion. Net sales for Sandoz fell 8 percent (-4 percent cc) to $8.7 billion. Vaccines and Diagnostics sales totaled $1.86 billion (-7 percent, -4 percent cc) for 2012. Consumer Health net sales dropped off 19 percent (-16 percent cc) to $3.74 billion.
For first-half 2013, Group net sales rose to $28.5 billion, advancing 2 percent (+4 percent cc) versus the same period during 2012. Currency had a negative effect of two percentage points, primarily because of the weakening yen against the U.S. dollar. Excluding the impact of patent expirations, underlying sales improved 8 percent in constant currencies versus January-June 2012. Growth products accounted for $8.7 billion or 31 percent of Group net sales, improving 14 percent compared to the first two quarters of 2012. Generics affected sales by $1.3 billion in 1H 2013, primarily due to Diovan and Zometa. U.S. sales in January-June 2013 continued to benefit from the delayed arrival of generic competition for Diovan monotherapy.
During the first six months of 2013, Novartis says Europe ($5.5 billion, +6 percent cc) benefitted from the continued strong performance of growth products. On the other hand, the United States ($5.1 billion, -5 percent cc) was affected by generic competition to Diovan HCT. Japan’s performance ($1.7 billion, 3 percent cc) for 1H 2013 was a year-over-year improvement because of new product launches. Latin America and Canada ($1.5 billion, +3 percent cc) maintained solid growth rates during the period in spite of generic arrivals. Emerging Growth Markets ($3.8 billion, +9 percent cc) in first-half 2013 were paced by double-digit growth from China.
Alcon net sales during first-half 2013 advanced 2 percent (+4 percent cc) year-over-year to $5.3 billion. Net sales for Sandoz grew 5 percent (+5 percent cc) to $4.48 billion compared to 1H 2012. For the Vaccines & Diagnostics division, net sales climbed up 14 percent to $738 million during the first six months of 2013. Consumer Health returned to growth as sales advanced 8 percent (+10 percent cc) to $1.99 billion over the January-June 2012 result. Animal Health delivered mid-single-digit growth for the first six months of 2013.
Product performance
During the course of 2012, Gleevec/Glivec became Novartis’ best-selling brand. The protein-tyrosine kinase inhibitor generated 2012 sales of $4.68 billion, up 4 percent in constant currencies. The oncology medicine’s approved uses include treating adult patients with metastatic and/or unresectable KIT+ gastrointestinal stromal tumors (GIST), as an adjuvant treatment for certain adult patients following resection of KIT+ GIST, and as a targeted therapy for Philadelphia chromosome-positive chronic myeloid leukemia (Ph+ CML). Initially introduced to the marketplace in 2001, Gleevec/Glivec is available in more than 110 countries.
For first-half 2013, Gleevec/Glivec sales improved 2 percent year-over-year at constant currencies to $2.33 billion. The signal transduction inhibitor gained U.S. approval in January 2013 and EU clearance during July 2013 for pediatric patients with newly diagnosed Philadelphia chromosome-positive acute lymphoblastic leukemia (Ph+ ALL) in combination with chemotherapy. ALL is the most common type of cancer in children.
Gleevec/Glivec’s active ingredient (imatinib mesylate) patent is scheduled to expire during 2015 in the United States, 2016 in the major EU countries, and 2014 in Japan; however, the drug is protected by additional patents claiming innovative features of Gleevec/Glivec.
Novartis’ best-seller before Gleevec/Glivec was the angiotensin II receptor antagonist Diovan franchise. The Diovan family was the No. 1 anti-hypertensive medication on a global sales basis in 2012. Diovan is the only agent in its drug class approved for treating each of these: high blood pressure (including children aged 6 to 18 years), high-risk heart-attack survivors, and patients with heart failure. Having debuted on the marketplace in 1996, Diovan (valsartan) is available in 120-plus countries for treating high blood pressure, in more than 90 countries for heart failure, and in over 70 countries for heart-attack survivors. The combination product Diovan HCT/Co-Diovan (valsartan and hydrochlorothiazide) was first launched in 1997 and is approved in more than 100 countries.
At its peak, the Diovan family of hypertension medicines generated more than $6 billion in annual worldwide sales during each of 2009 and 2010. After producing 2011 global sales of $5.67 billion, the 2012 total decreased to $4.42 billion. Diovan and Diovan HCT have been experiencing a global sales decline because of the loss of exclusivity of each medicine in the European Union, Canada, and the United States.
According to Novartis, the brand line’s 2012 performance was sustained in key Emerging Growth Markets including China, as well as certain countries in Latin America, Asia Pacific, Middle East, and Africa.
The patent on valsartan expired in the major EU countries during November 2011 and in the United States during September 2012. Generic competitors to Diovan HCT have launched in the United States but none have emerged yet versus Diovan monotherapy, though they could be introduced to the American market at any time. Patent protection for valsartan was due to expire in Japan during 2013, and in 2016 for the Co-Diovan combination product (including patent-term extensions).
Worldwide sales for the Diovan franchise amounted to $1.85 billion during first-half 2013, dropping 21 percent at constant currencies versus the January-June 2012 performance. The global sales decline resulted from the exclusivity loss in Europe, the United States, Canada and other markets. On the other hand, continued growth was reported during second-quarter 2013 in China and select markets in Latin America, Asia Pacific, the Middle East and Africa. Additionally, U.S. sales continued to benefit from the delayed entry of generic competition for Diovan monotherapy.
The active ingredient valsartan is also used along with the calcium channel blocker amlodipine in the single-pill combination therapy Exforge for high blood pressure. Available in 100-plus countries, Exforge was initially approved for treating high blood pressure in Switzerland during 2006, and in the United States and European Union in 2007. The following year, U.S. regulators cleared Exforge for the first-line treatment of hypertension in patients likely to need multiple drugs to achieve their blood pressure goals. During January 2010, Exforge was approved for marketing in Japan and introduced in China.
Novartis’ Exforge HCT is a single pill joining together three widely prescribed high blood pressure treatments: the ARB valsartan, the calcium channel blocker amlodipine, and the diuretic hydrochlorothiazide. The combination medication was approved by U.S. and EU health regulators during 2009, and is available in 60-plus countries.
The Exforge franchise was Novartis’ fifth-best-selling product line in 2012 with sales of $1.35 billion, compared to $1.21 billion during 2011. Global sales continued to increase during the first six months of 2013, rising 15 percent year-over-year at constant currencies to $725 million. The first-half 2013 growth was spurred by strong performances in Europe, the Asia Pacific and Middle East, as well as continuing Exforge HCT launches in Asia and Latin America.
The patent covering Exforge is set to expire during 2019, and has been challenged by U.S. and EU generic manufacturers. Novartis holds regulatory exclusivity for the data generated for Exforge in Europe until 2017 and in Japan until 2014. According to the company, there is a risk that generic manufacturers may circumvent regulatory exclusivity and gain approval of a combination valsartan-amlodipine product in Europe before 2017. The patent for Exforge HCT is scheduled to expire during 2023 and has been challenged in the United States. Through a license deal with a generics manufacturer, the Exforge franchise is expected to face U.S. generic competition starting in October 2014.
Novartis’ third best seller is the eye medicine Lucentis (ranibizumab). The recombinant humanized high affinity antibody fragment binds to vascular endothelial growth factors (VEGF). Lucentis is the only anti-VEGF therapy approved in many countries for three ocular indications: wet age-related macular degeneration (wet AMD), visual impairment due to diabetic macular edema (DME), and visual impairment due to macular edema secondary to retinal vein occlusion (RVO). The drug is approved in 100-plus countries to treat patients with wet AMD. Lucentis is approved for treating visual impairment due to DM and macular edema secondary to RVO in over 80 countries. Since its market introduction during 2007, there are more than 1.5 million patient-treatment years of exposure for Lucentis. The product has been developed in collaboration with Genentech, which holds the U.S. rights to Lucentis.
Patent protection for ranibizumab expires during 2018-2022 in the European Union and Japan. MedImmune filed a patent-infringement suit during December 2009 against Novartis in the United Kingdom and elsewhere in Europe, alleging that Lucentis infringes MedImmune’s patents. MedImmune’s European patents expired during 2011, but have been extended to 2016 in several European countries including Italy, Germany, the UK and France, and may be extended elsewhere in Europe. Novartis filed countersuits throughout Europe alleging non-infringement and invalidity.
Lucentis worldwide sales for 2012 amounted to $2.4 billion, up 22 percent in constant currencies compared to the previous calendar term. The drug’s sales for first-half 2013 totaled $1.17 billion, about the same amount as generated during the first six months of 2012. Lucentis produced strong double-digit volume growth during second-quarter 2013, fueled by launches in new indications with high unmet need (specifically, visual impairment due to diabetic macular edema and visual impairment due to macular edema secondary to retinal vein occlusion). Novartis says pricing had a negative impact on Lucentis sales in the second quarter, primarily due to one-time reductions necessary to secure reimbursement for new indications. Combined with competitive pressure in certain markets, particularly Japan and Australia, this led to slightly lower sales than in 2Q 2012.
Novartis’ No. 2-selling oncology medicine after Gleevec/Glivec is the acromegaly treatment Sandostatin (octreotide acetate). Acromegaly is a chronic disease that results from over-secretion of pituitary growth hormone in adults. Sandostatin is additionally indicated for treating patients with certain symptoms associated with carcinoid tumors and other forms of gastrointestinal and pancreatic neuroendocrine tumors. Sandostatin as a subcutaneous injection (SC) was initially introduced during 1988 and is approved in 100-plus countries. The injectable suspension Sandostatin LAR has been approved in 41 countries (as of July 2013) for the delay of tumor progression in patients with midgut carcinoid tumors. A new presentation of Sandostatin LAR – which includes a new diluent, safety needle and vial adapter improving the mixing and administration – has been cleared for marketing in at least 34 countries, with other filings under way.
Global 2012 sales for the Sandostatin family came in at $1.51 billion, rising 8 percent in constant currencies over the 2011 performance. First-half 2013 sales for the somatostatin analogue grew 6 percent in constant currencies to $772 million. Sandostatin SC is up against global generic competition. Formulation patents covering Sandostatin LAR expired in July 2010 in all countries except the United States, where the expiration of formulation patents starts from the end of 2014. The expiration of the last formulation U.S. patent is January 2017. As of early 2013, there were no equivalent versions of Sandostatin LAR in any markets.
Another established blockbuster franchise for Novartis is Exelon (rivastigmine tartrate) and Exelon Patch (rivastigmine transdermal system). The cholinesterase inhibitors are indicated for treating Alzheimer’s disease (AD) dementia and Parkinson’s disease (PD) dementia. Exelon capsules have been on the market since 1997 to treat mild-to-moderate AD dementia in 90-plus countries. In 2006, Exelon became the first cholinesterase inhibitor to be approved in the United States and European Union for mild-to-moderate PD dementia in addition to Alzheimer’s disease. Once-daily Exelon Patch was cleared for U.S. and EU marketing during 2007. The drug is approved for treating mild-to-moderate AD in over 85 countries, including more than 20 countries where it is also cleared for Parkinson’s disease dementia.
Exelon capsule is facing generic competition in several markets, including the United States. FDA during August 2012 approved a higher dose of Exelon Patch for treating individuals with mild-to-moderate AD and mild-to-moderate PD dementia. CHMP in November 2012 issued a positive opinion for the approval of the higher dose of Exelon Patch for patients with mild to moderately severe Alzheimer’s disease.
Exelon family sales totaled $1.05 billion during 2012 and $1.07 billion in 2011. Sales during first-half 2013 for the Exelon franchise rose 1 percent at constant currencies over first-half 2012 to $529 million. Exelon Patch sales during second-quarter 2013 advanced 13 percent and generated 93 percent of total franchise sales for the period. The introduction of a high-dose patch in mild-to-moderate Alzheimer’s disease contributed to increased U.S. growth. FDA during second-quarter 2013 expanded the indication for Exelon Patch to include the treatment of patients with severe Alzheimer’s disease.
Patent protection for rivastigmine, granted to Proterra and licensed to Novartis, expired in August 2012 in the United States and during 2011 in most other major markets. Novartis holds a U.S. patent on a specific isomeric form of rivastigmine that expires in 2014. Exelon Patch is covered by a formulation patent that runs its course in 2019 in major markets. In Europe, Exelon Patch – launched in Germany, the United Kingdom, the Netherlands, Sweden, and Finland – is subject to competition from generic rivastigmine patches 5 cm2 and 10 cm2.
Novartis has a collection of newer products on the market that are poised to drive growth during at least the next five years: Gilenya, Afinitor/Votubia, Tasigna, and the Galvus group. The leader of this pack is Gilenya (fingolimod), the first in a new class of multiple sclerosis therapies known as sphingosine 1-phosphate receptor modulators. Gilenya is the first oral therapy approved to treat relapsing-remitting MS (RRMS). In the United States, Gilenya is approved for relapsing forms of multiple sclerosis. In the EU, Gilenya is approved for adult patients with highly active RRMS defined as either high-disease activity despite treatment with beta interferon, or rapidly evolving severe relapsing-remitting MS. The product is cleared for marketing in at least 75 countries and is licensed from Mitsubishi Tanabe Pharma.
After generating 2011 sales of $494 million, Gilenya produced $1.2 billion for 2012. Gilenya sales totaled $889 million during first-half 2013, up 68 percent at constant currencies over the first six months of 2012. The medicine continues to generate rapid growth and is supported by recent analyses of Phase III data demonstrating that it significantly and consistently reduces the rate of brain volume loss versus a comparator. According to Novartis, with the approval of new oral treatments in the United States and their anticipated approvals in Europe, the company expects the size of the oral market to continue to increase throughout 2013.
Patent protection for fingolimod is scheduled to expire during 2019 in the United States and during 2018 in Europe (including a five-year patent-term extension in both regions). In Europe, Novartis holds regulatory exclusivity for the data generated for approval of Gilenya until 2021, which could possibly be extended by another year. A patent for the product’s commercial formulation has been granted in most major markets. This patent is set to expire during 2024 in most countries, including the EU and Japan, and during 2026 in the United States. A U.S. patent application is awaiting clearance for the commercial formulation of Gilenya that, if granted, would expire in 2024.
Afinitor/Votubia (everolimus) is on its way to annual blockbuster sales status for the first time in 2013. The oral inhibitor of the mTOR pathway is approved in over 80 countries and regions for advanced renal cell carcinoma after vascular endothelial growth factor-targeted therapy. The drug is approved in nearly 50 countries for treating advanced pancreatic neuroendocrine tumors. Afinitor is cleared for marketing in 46 countries for advanced hormone receptor-positive, HER2-negative breast cancer.
Everolimus also has been granted approval in 40-plus countries to treat patients with subependymal giant cell astrocytoma (SEGA) associated with tuberous sclerosis complex (TSC) who require therapeutic intervention but are not candidates or amenable for surgery. During August 2012, U.S. regulators approved a new formulation of the product: Afinitor Disperz tablets for oral suspension. This dispersible form was cleared for marketing in Japan during December 2012. Everolimus is also available for treating adult patients with renal angiomyolipomas and TSC who do not require immediate surgery. Everolimus, which is also marketed by Novartis under the brand names Zortress/Certican for use in transplantation, is exclusively licensed to Abbott and sublicensed to Boston Scientific for use in drug-eluting stents.
Afinitor/Votubia global sales climbed up from $443 million during 2011 to $797 million over the course of 2012. The sales ascent continued during January-June 2013 to $611 million due to 94 percent year-over-year growth at constant currencies. The robust growth was aided by the additional regulatory approvals and launches in HR+/HER2- advanced breast cancer, subependymal giant cell astrocytoma associated with tuberous sclerosis complex and renal angiomyolipoma associated with TSC.
Tasigna (nilotinib) is also on its way to generating $1 billion in sales for the first time in 2013. The drug is a signal transduction inhibitor of the tyrosine kinase activity of Bcr-Abl, KIT and the PDGF-receptor. Since being introduced to the marketplace in 2007, Tasigna is approved in over 95 countries to treat patients with Ph+ CML in the chronic and/or accelerated phase who are resistant or intolerant to existing treatment, including Gleevec/Glivec. Tasigna has been cleared for approval in 70-plus markets to treat newly diagnosed patients in the chronic phase. In addition to the continuing clinical trials in Ph+ CML, studies are under way exploring the use of Tasigna in patients with c-Kit mutated, advanced melanoma.
Tasigna sales jumped up from $716 million for 2011 to $998 million for 2012. Sales went up from $446 million in first-half 2012 to $599 million during the first six months of 2013 as the medicine continues to be recognized as a more effective, targeted therapy than Gleevec/Glivec for adult patients with Ph+ CML. Tasigna’s market share remains on the rise in markets around the globe in first-line and second-line settings. Patent protection for Tasigna’s main chemical is due to run out during 2023 in the United States and other major markets.
The Galvus family generated 2012 sales of $910 million, improving 43 percent (cc) versus the 2011 result. Strong growth was generated in key markets, especially in Europe, Japan, Latin America and Asia Pacific. The performance was spurred by a continued focus on patients whose diabetes remains uncontrolled on metformin, as well as an expansion of usage in new patient segments based on new indications.
The Galvus group of type 2 diabetes treatments includes Galvus (vildagliptin), an oral DPP-4 inhibitor, and Eucreas, a single-pill combination of vildagliptin and metformin. First approved during 2008, the oral DPP-4 inhibitor Galvus is cleared for marketing in 100-plus countries. Eucreas was the first single-pill combining a DPP-4 inhibitor and metformin to be introduced in Europe. Initially cleared for marketing during 2008 as well, Eucreas is approved in over 85 countries.
First-half 2013 worldwide sales for the Galvus group came in at $556 million, up 38 percent in constant currencies versus the first six months of 2012. The products continued to generate strong growth across markets such as Europe, Japan, Latin America and Asia Pacific. Novartis says their performance was fueled by a continued focus on patients whose diabetes remains uncontrolled on metformin, as well as an expansion of usage in new patient segments based on new indications. Patent protection for vildagliptin is on track to expire (with extensions) from 2019 through 2024.
In the pipeline/recent drug approvals
Novartis possesses one of the industry’s most competitive pipelines. More than 200 projects are in clinical development, including 141 in Pharmaceuticals as of July 2013. The company spent a total of $9.33 billion ($9.12 billion excluding impairment and amortization charges) on R&D during the course of 2012, versus $9.58 billion in 2011 (or $9.24 billion in core R&D). Pharmaceuticals accounted for $6.92 billion ($6.7 billion on a core basis) of overall research and development in 2012, accounting for 21.5 percent (20.8 percent on a core basis) of Pharmaceuticals’ total net sales.
Novartis’ Group R&D for the first six months of 2013 amounted to $4.74 billion, compared to $4.52 during same-period 2012. Pharmaceuticals accounted for $3.49 billion ($3.26 billion in 1H 2012), Alcon represented $485 million ($496 million in 1H 2012), Sandoz spent $391 million ($384 in 1H 2012), the Vaccines & Diagnostics expenditure was $221 million ($239 million in 1H 2012), and the Consumer Health spend was $146 million ($140 million in 1H 2012).
Underpinning Novartis’ long-term growth strategy – which is based on leveraging the Group’s science-based innovation across high-growth segments of the healthcare industry – is a consistent concentration on three core priorities: innovation, growth and productivity. Novartis has continued to make solid advances in each of these areas during 2013.
Novartis during September 2013 revealed new analyses of data for once-daily Ultibro Breezhaler (investigational QVA149 – indacaterol 85 mcg/glycopyrronium 43 mcg delivered dose, equivalent to 110 mcg/50 mcg metered dose per capsule). The data demonstrated significant improvements in lung function, shortness of breath and health-related quality of life for chronic obstructive pulmonary disease patients versus all comparators.
QVA149 is being studied in a clinical-development program with more 10,000 patients. The investigational product is a fixed-dose combo of two bronchodilators: the long-acting beta2-adrenergic agonist Onbrez Breezhaler (indacaterol maleate) and the long-acting muscarinic antagonist Seebri Breezhaler (glycopyrronium bromide). Both products are on the market as individual therapies for treating COPD. QVA149 received a positive opinion for approval from the European Medicine Agency’s Committee for the Human use of Medicinal Products during July 2013 as a maintenance bronchodilator treatment to relieve symptoms in adult patients with COPD.
Ilaris (canakinumab) became the first interleukin-1 beta inhibitor for treating systemic juvenile idiopathic arthritis and the only treatment approved specifically for SJIA that is given as a monthly subcutaneous injection in the EU, as announced by Novartis in September 2013. The drug was approved by the European Commission for use in patients aged 2 years and older who suffer from SJIA and who have responded inadequately to previous therapy with non-steroidal anti-inflammatory drugs and systemic corticosteroids. Ilaris gained FDA approval for treating active SJIA during May 2013.
Ilaris became the first biologic approved in the European Union for symptomatic pain relief in gouty arthritis, as announced by Novartis in early March 2013. Ilaris is the first approved fully human monoclonal antibody targeting interleukin-1 beta (IL-1 beta). The drug is administered in one subcutaneous injection.
RLX030 is being evaluated by health authorities worldwide, including by FDA and the EMA, for treating acute heart failure (AHF). During June 2013, the U.S. regulatory agency granted RLX030 Breakthrough Therapy designation status, recognizing its potential to address a serious unmet medical need. If cleared for marketing, the investigational medicine has the potential to be the first treatment breakthrough for AHF patients in 20 years.
Bimagrumab is another Novartis investigational drug that gained Breakthrough Therapy designation status during 2013 (in August). If granted marketing approval, BYM338 has the potential to be the first treatment for patients with sporadic inclusion body myositis (sIBM), a rare yet potentially life-threatening muscle-wasting condition. Bimagrumab was developed by the Novartis Institutes for Biomedical Research in collaboration with Morphosys to treat pathological muscle loss and weakness. The novel, fully human monoclonal antibody binds with high affinity to type II activin receptors, preventing natural ligands from binding, including myostatin and activin. Bimagrumab stimulates muscle growth by blocking signaling from these inhibitory molecules.
Novartis announced in early August 2013 FDA’s approval of Menveo (Meningococcal Group A, C, W-135 and Y conjugate vaccine) for the prevention of meningococcal disease caused by four strains of the bacterium Neisseria meningitidis in infants and toddlers from 2 months of age. With this expanded indication, U.S. pediatricians can now offer one vaccine for the protection of infants, children and adolescents against four of the five most common serogroups that cause meningococcal disease. The quadrivalent conjugate vaccine has been available for use in adolescents and adults (11 to 55 years of age) since February 2010 and in children (2 to 10 years of age) since January 2011.
Secukinumab demonstrated superiority to the megabrand Enbrel (etanercept) in a head-to-head Phase III psoriasis trial, as revealed by Novartis in July 2013. According to the company, all primary and secondary endpoints were met. Regulatory filings for secukinumab are on track for second-half 2013. Secukinumab is a fully human monoclonal antibody that selectively binds to and neutralizes IL-17A, a central cytokine (messenger protein) in the development of psoriasis.
Also in July 2013, Lucentis became the first licensed therapy to improve vision in patients with visual impairment due to choroidal neovascularization secondary to pathologic myopia. The European Commission granted Novartis the new indication, making Lucentis the first anti-VEGF therapy licensed for four indications in the European Union.
Phase III data released in June 2013 demonstrated that omalizumab significantly improves itch in patients with a severe form of the skin disease chronic spontaneous urticaria. CSU is a chronic and debilitating type of hives with restricted approved treatment options. Omalizumab met all primary and secondary endpoints in the pivotal GLACIAL trial of patients with refractory chronic spontaneous urticaria. Regulatory filings for omalizumab in CSU are on track by year-end 2013.
The targeted therapy omalizumab is unique in binding to immunoglobulin E (IgE). The drug may suppress histamine-induced skin reactions via its reduction of IgE and downstream effects on cellular activation mechanisms. Omalizumab is already marketed globally by Novartis and Roche under the trade name Xolair in 90-plus countries for treating severe allergic asthma.
Sandoz initiated a Phase III study for the biosimilar etanercept during June 2013. The study is anticipated to support eventual U.S. and EU marketing submissions. The global trial seeks to confirm biosimilarity with regard to safety, efficacy and immunogenicity of the Sandoz product versus the blockbuster medicine Enbrel in patients with moderate-to-severe chronic plaque-type psoriasis.
Results from a Phase III three-year follow-up trial revealed in June 2013 demonstrated that Jakavi (ruxolitinib) improved overall survival and sustained reductions in spleen size versus conventional therapy. In a separate long-term exploratory analysis, Jakavi slowed or stabilized the advancement of bone-marrow fibrosis, which is one of the underlying disease mechanisms and consequences of myelofibrosis.
Jakavi is an oral inhibitor of the JAK 1 and JAK 2 tyrosine kinases. The product was approved by the European Commission in August 2012 for treating disease-related splenomegaly or symptoms in adult patients with primary myelofibrosis (additionally known as chronic idiopathic myelofibrosis), post-polycythemia vera myelofibrosis or post-essential thrombocythemia myelofibrosis. Jakavi is cleared for marketing in 45-plus countries, including the European Union, Canada and certain countries in Asia, Latin and South America. Other global regulatory filings are under way.
Novartis licensed ruxolitinib from Incyte for non-U.S. development and commercialization. The European Commission and FDA granted ruxolitinib orphan-drug status for myelofibrosis. Ruxolitinib is marketed in the United States by Incyte under the brand name Jakafi for treating patients with intermediate or high-risk myelofibrosis. The medicine was initially FDA-approved during November 2011.
Data for LDK378 demonstrated a marked clinical response in 78 patients with anaplastic lymphoma kinase positive (ALK+) metastatic non-small cell lung cancer (NSCLC) who had progressed during or after crizotinib therapy or had not been previously treated with crizotinib. The data, which showed a 60 percent overall response rate, was announced in June 2013. LDK378 is a selective inhibitor of ALK, which is a target found in metastatic NSCLC. U.S. regulators designated the new drug candidate as a Breakthrough Therapy during March 2013. The first regulatory submission for marketing clearance of the investigational compound is slated for early 2014.
FDA approval was granted for Alcon’s Simbrinza Suspension in April 2013. The new product is indicated for the reduction of elevated intraocular pressure in patients with primary open-angle glaucoma or ocular hypertension. According to Alcon, Simbrinza offers an array of treatment possibilities due to its strong efficacy. Simbrinza Suspension is a fixed-dose combo of the carbonic anhydrase inhibitor brinzolamide and the alpha 2 adrenergic receptor agonist brimonidine tartrate in a multi-dose bottle.
Another new product win for Alcon came in March 2013 when the European Commission approved Jetrea intravitreal injection (ocriplasmin). The breakthrough drug was granted EU clearance for treating vitreomacular traction, including when associated with macular hole of diameter less than or equal to 400 microns.
Zortress became the first mTOR inhibitor FDA-approved to prevent organ rejection in adult liver transplant patients during February 2013. Zortress is the first immunosuppressant cleared by FDA in more than a decade for use following liver transplantation. The drug was previously given the green light in the United States during April 2012 for a kidney transplantation indication. Everolimus was approved under the trade name Certican by European regulators during fourth-quarter 2012 for use in adult liver transplant patients.
Exjade (deferasirox) during January 2013 was the first treatment to obtain U.S. regulatory clearance for chronic iron overload in patients with non-transfusion-dependent thalassemia (NTDT). Thalassemia represents a diverse collection of genetic disorders that affect red blood cell production, resulting in anemia.
Bexsero (Meningococcal Group B Vaccine [rDNA, component, adsorbed]) gained EU approval in January 2013 as the first vaccine to prevent the leading cause of life-threatening meningitis across Europe. Bexsero was cleared to help protect all age groups against meningococcal serogroup B (MenB) disease, including infants who are the most vulnerable. The vaccine was approved for use in individuals from 2 months of age and older. Marketing clearance for Bexsero also was granted by Australian health regulators in August 2013.
Product sales and financial performance
| PRODUCT | 2012 SALES | 2011 SALES |
|---|---|---|
| Gleevec/Glivec | $4,675 | $4,659 |
| Diovan, Diovan HCT | $4,417 | $5,665 |
| Lucentis | $2,398 | $2,050 |
| Sandostatin | $1,512 | $1,443 |
| Exforge, Exforge HCT | $1,352 | $1,209 |
| Zometa | $1,288 | $1,487 |
| Gilenya | $1,195 | $494 |
| Exelon, Exelon Patch | $1,050 | $1,067 |
| Tasigna | $998 | $716 |
| Galvus, Eucreas | $910 | $677 |
| Exjade | $870 | $850 |
| Neoral, Sandimmun | $821 | $903 |
| Afinitor/Votubia | $797 | $443 |
| Voltaren Group (excl. OTC) | $759 | $794 |
| Reclast/Aclasta | $590 | $613 |
| Myfortic | $579 | $518 |
| Ritalin, Focalin | $554 | $550 |
| Comtan, Stalevo | $530 | $614 |
| Xolair | $504 | $478 |
All sales are in millions of dollars.
| 2012 | 2011 | |
|---|---|---|
| Revenue | $56,673 | $58,566 |
| Net Income | $9,618 | $9,245 |
| EPS | $3.89 | $3.78 |
| R&D | $9,332 | $9,583 |
| 1H13 | 1H12 | |
|---|---|---|
| Revenue | $28,504 | $28,038 |
| Net Income | $4,970 | $4,944 |
| EPS | $1.98 | $2.01 |
| R&D | $4,736 | $4,520 |
All figures are in millions of dollars except EPS.