Novartis-Penn Join for Cancer R&D

Zacks

Novartis AG (NVS) recently entered into a global collaboration agreement with the University of Pennsylvania (Penn) to further their research on targeted chimeric antigen receptor (CAR) immunotherapies for the treatment of cancer.

The parties will also set up a new research and development facility called the Center for Advanced Cellular Therapies (:CACT) at Penn to develop and produce CARs. This will help them to boost the discovery and development process of additional therapies using CAR immunotherapy.

As per the multi-year global collaboration agreement, Novartis purchased the exclusive rights of CART-19, a novel investigational CAR therapy, which is being studied in a pilot clinical trial.

We note that results from a clinical study of CART-19 showed effectiveness in three patients with advanced chronic lymphocytic leukemia, who previously underwent multiple courses of chemotherapy and biological therapy. Two of these patients were in complete remission for more than a year into the trial, whereas the third patient maintained partial remission for more than seven months. Novartis, along with Penn, will be initiating a phase II clinical trial on CART-19 in the fourth quarter this year.

In lieu of the worldwide rights to CART-19 and other CARs developed under this program, Novartis will make an up-front payment, finance research and establishment costs of CACT and make other milestone payments on the achievement of certain clinical, regulatory and commercial milestones. The company will also be liable to make royalty payments.

Our Take

We are encouraged by Novartis’ collaboration with Penn in the areas of cancer research. We believe that Penn’s innovative CAR technology and Novartis’ global exposure will together bring a new era in cancer treatment.

Currently, we have a Neutral recommendation on Novartis. The company carries a Zacks #3 Rank (Hold rating) in the short run.

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