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Novartis and Other Drug Stocks With FDA Catalysts in April

Is (PSEC) Outperforming Other Finance Stocks This Year?

Last year turned out to be pretty good for pharma and biotech stocks as far as FDA decisions are concerned. The regulatory body approved 46 novel drugs, easily surpassing 2016’s total tally of 22.

Landmark decisions last year include the approval of a couple of gene-based therapies for cancer – Novartis’s NVS Kymriah and Gilead Sciences’ GILD Yescarta. These therapies have the potential to change the way we look at cancer treatments.

With just a quarter gone by this year, the FDA has already granted approval to six new treatments. Key approvals include J&J’s JNJ next-generation oral androgen receptor (“AR”) inhibitor Erleada (apalutamide) for pre-metastatic prostate cancer (CRPC), Vertex Pharmaceuticals Incorporated’s VRTX third medicine to treat the underlying cause of CF, Symdeko, which is a combination of tezacaftor and ivacaftor, Gilead’s once-daily single tablet HIV regimen Biktarvy and Novartis’s Lutathera for certain gastroenteropancreatic neuroendocrine tumors.

With the drug development process being lengthy and time-consuming, plus requiring the utilization of a lot of funds and resources, key pipeline events including data readouts and regulatory updates are of paramount importance and could act as major catalysts. Let’s take a look at a few important regulatory events scheduled for the month of April.

Note that this month, the FDA has already approved Pacira Pharmaceuticals’s Exparel for a new indication as a nerve block for regional analgesia and Clovis Oncology’s PARP inhibitor Rubraca as maintenance therapy for recurrent ovarian cancer.

Second Indication for Novartis’ Kymriah: On Apr 30, the FDA is expected to give its decision on Novartis’ supplemental biologics license application (BLA) looking for approval of Kymriah for its second indication. With the latest filing, Novartis is looking to get Kymriah approved for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBLC) — most common form of non-Hodgkin’s lymphoma — who have failed two or more prior therapies. Kymriah was approved for the treatment of a deadly cancer called acute lymphoblastic leukemia last August. According to the company’s annual report, 10-15% of DLBLC patients do not respond to initial therapy or relapse within three months of treatment, indicating the significant market potential for Kymriah in the DLBLC indication.

FDA Decision on Mallinckrodt’s Label Expansion of Amitiza in Children: Mallinckrodt plc’s MNK supplemental new drug application (sNDA) looking to get its constipation drug Amitiza approved for paediatric functional constipation between six and 17 years, is under review. The FDA is expected to give its decision on Apr 28. Amtiza was added to Mallinckrodt’s portfolio with the February acquisition of Sucampo Pharmaceuticals.

Amitiza is already approved for chronic idiopathic constipation (CIC) in adults, irritable bowel syndrome with constipation (IBS-C) among adult women and opioid-induced constipation (OIC) in patients with chronic non-cancer pain. According to the company’s press release, Amitiza, if approved for paediatric functional constipation, would be the first and only prescription medication specifically approved for such patients, who have limited treatment options to address their disease.

Will an FDA Panel Back GW Pharmaceuticals’ Epidiolex and Incyte/Lilly’s Olumiant? An FDA panel is expected to give its opinion on GW Pharmaceuticals’ lead cannabinoid pipeline candidate, Epidiolex, next week. GW Pharmaceuticals is looking to get Epidiolex approved as an adjunctive treatment for seizures associated with Lennox-Gastaut syndrome (“LGS”) and Dravet syndrome. Both are highly treatment-resistant forms of childhood-onset epilepsy.

With the FDA granting priority review to Epidiolex’s NDA, a response from the FDA is expected by Jun 27, 2018. Epidiolex represents blockbuster potential especially if it is approved across all possible indications.

An FDA panel is also expected to give its opinion this month on Incyte/Lilly’s LLY Olumiant (baricitinib) for the treatment of adult patients with moderately to severely active rheumatoid arthritis. In April 2017, the companies had received a complete response letter (CRL) from the FDA for baricitinib. The FDA required additional clinical data. TheNDA for Olumiant was re-submitted in January. Olumiant has already been launched in select European countries and in Japan, and fetched sales of $46 million in 2017.

Although the FDA takes the recommendations of its panels/advisory committe into account while reviewing applications, it is not bound to follow the same.

FDA Decisions for Rigel’s Tavalisse and Ultragenyx’s Burosumab on April 17: The FDA is expected to give its decision on Rigel Pharmaceuticals NDA for Tavalisse (fostamatinib) for the treatment of chronic immune thrombocytopenia (ITP) on Apr 17. Rigel is preparing for the launch of this oral spleen tyrosine kinase (SYK) inhibitor in the second quarter, if approved. Existing therapies to treat chronic ITP include steroids, blood platelet production boosters (TPOs) and splenectomy. However, still the disease remains inadequately treated in many patients. This means that if approved, Tavalisse should enjoy significant market potential.

Another FDA decision expected on Apr 17 is on Ultragenyx Pharmaceutical’s BLA for burosumab to treat pediatric and adult patients with X-Linked Hypophosphatemia (XLH). Burosumab was approved for treating XLH by the trade name of Crysvita in the EU in February.

FDA to Decide on Prometic’s Ryplazim: This FDA decision, expected on Apr 14, will be on Canadian biotech Prometic Life Sciences’ biologics license application (BLA) for Ryplazim for the treatment of congenital plasminogen deficiency. Ryplazim enjoyed Orphan Drug and Fast Track Designations by the FDA for the said indication.

Bristol Myers’ Opdivo+Yervoy Combo to Get FDA Approval? Bristol Myers BMY has filed an sBLA looking get its blockbuster drug Opdivo approved in combination with its another cancer drug Yervoy in patients with previously untreated advanced or metastatic renal cell carcinoma (“RCC”). The FDA decision is expected in Apr 16.

In clinical studies, the combination has demonstrated superior overall survival (OS) compared with the current standard of care sunitinib in intermediate- and poor-risk patients. This bodes well for the drug given the potential in the targeted market.

The PD-1 inhibitor is presently approved in several countries including the United States, the EU and Japan for several cancer indications. Label expansion should boost Opdivo’s sales further. Opdivo generated sales of almost $5 billion in 2017.

Bristol-Myers is a Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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