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Novartis Gets Second Breakthrough Designation for Kisqali

Zacks Equity Research

Novartis AG NVS recently announced that the FDA has granted the Breakthrough Therapy designation to its breast cancer drug, Kisqali, for the initial endocrine-based treatment of pre- or peri-menopausal women with hormone-receptor positive, human epidermal growth factor receptor-2 negative (HR+/HER2-) advanced or metastatic breast cancer, in combination with tamoxifen or an aromatase inhibitor.

The above-mentioned designation is based on positive results from the MONALEESA-7 trial, wherein Kisqali, in combination with tamoxifen or an aromatase inhibitor as initial endocrine-based therapy, significantly prolonged progression-free survival (PFS) compared to endocrine therapy.

The designation from the FDA is intended to expedite the development and review of potential new medicines which treat serious or life-threatening conditions. This designation includes all of the Fast Track program features, as well as more intensive FDA guidance on an efficient drug-development program. We remind investors that this is the second Breakthrough Therapy designation for Kisqali. The first one was granted in August 2016 based on results of the phase III MONALEESA-2 trial.

It should also be noted that the FDA already approved Kisqali, in combination with any aromatase inhibitor, as a treatment for metastatic breast cancer in March 2017. Kisqali in combination with letrozole was added to the National Comprehensive Cancer Network Clinical Practice Guidelines in Oncology (NCCN Guidelines) as a category 1 option for HR+/HER2- postmenopausal metastatic breast cancer patients. The drug was also approved in Europe in August 2017.

 

Shares of Novartis have rallied 21.1% over the past year compared with the industry’s 19.3% gain.

We note that Novartis has a strong oncology portfolio. The company’s breast cancer portfolio includes drugs like Afinitor, Kisqali and Tykerb.  Approval of new drugs and label expansion of existing drugs will further enhance its portfolio.

In March 2015, Novartis had acquired certain oncology products and pipeline compounds from GlaxoSmithKline plc GSK for $16 billion. In exchange, the company had sold its non-influenza Vaccines business to Glaxo for $7.1 billion.

However, the breast cancer market is crowded with stalwarts like Roche Holdings RHHBY among others. The loss of patent protection for some of the key drugs in Novartis’ portfolio is a cause of concern. Moreover, Kisqali’s uptake has been slow.

Zacks Rank & Key Pick

Novartis currently carries a Zacks Rank #4 (Sell).

A better-ranked health care stock is Sucampo Pharmaceuticals SCMP carrying a Zacks Rank #2 (Buy).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sucampo’s earnings per share estimates have moved up from $1.15 to $1.19 for 2018 in the last 60 days. The company beat estimates in three of the last four quarters, with an average beat of 15.63%. Share price of the company appreciated 28.6% in the last twelve months.

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