Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Novartis' Plans to Protect Sandostatin's Billion-Dollar Franchise

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Tough-to-treat tumors present big challenges and opportunities for big pharma oncology teams. These teams are spending big money bulking up pipelines with specialty drugs designed to replace prior generation therapies.

Novartis  (NYSE: NVS  ) has been preparing for a reacceleration of patent expiration by bringing Signifor through clinic in hopes it will step in and win some of the market share that Sandostatin is posed to give up when it loses patent protection in 2014.

The Sandostatin cliff
Sandostatin is a drug that helps regulate the pituitary gland and reduce the symptoms associated with growth hormone producing tumors common in acromegaly, a rare and potentially life-threatening condition. The hard-to-diagnose condition takes as many as 12 years to diagnose following the first symptoms and just 6 of 100,000 people are diagnosed with it each year.

In most cases, acromegaly is caused by a non-cancerous pituitary tumor that produces growth hormone. Overproduction can also be caused by hypothalamic tumors and non-endocrine tumors -- although those causes are rarer.

The reason the disease is hard to diagnose is because symptoms are fairly common and include stomach pain, diarrhea, and flushing. Once diagnosed, the most common treatment of pituitary tumors is surgery.

But, in cases where surgery isn't possible -- and in many cases as part of pre- or post-therapy -- Novartis Sandostatin is prescribed. As a result, the drug generated $1.5 billion in sales during 2012, 5% more than it produced in 2011.  That sales strength is continuing this year. Of the $2.7 billion Novartis generated in oncology sales during the third quarter, Sandostatin accounted for $401 million, up 7% from a year ago. Of those sales, $216 million were generated internationally. Worldwide, sales of Sandostatin total $1.17 billion in the first nine months, up 7% from last year.

Protecting the Sandostatin franchise
Given its blockbuster status, the stakes are high for Novartis to protect its Sandostatin franchise. The company hopes its drug Signifor, approved as a treatment for Cushing's disease last December, can win FDA approval for acromegaly before Sandostatin loses patent protection next June. The company is ushering the drug through phase 3 studies and plans to file for the indication soon.

Phase 3 results released in May show that Signifor offers promising results in treating acromegaly. In the study, 31% of patients on Signifor gained full control over their disease, compared to 19% of patients treated with Sandostatin. If Signifor does gain approval, it will offer Novartis patent protection until 2026 -- giving Novartis a long-term opportunity to maintain hundreds of millions in sales annually.

Competitive threats remain
Although there aren't many other treatments available, Pfizer (NYSE: PFE  ) has been marketing its Somavert as a treatment since winning FDA approval in 2003. In trials, those treated with 10, 15 or 20 mg/day of Somavert saw serum IGF-I levels -- a marker for growth hormone production -- normalize in 39%, 75% and 82% of patients, well above the 10% for those on placebo. Sales of the drug climbed 16% internationally and 8% in the United States during Q3 to $43 million and $13 million, respectively. That brought worldwide year to date sales to $159 million, up 11%.

But, a more disruptive treatment may be in the wings. Roche (NASDAQOTH: RHHBY) acquired the rights to a promising drug, Octreolin, from Chiasma earlier this year in a deal worth up to $595 million. Because Octreolin is dosed orally, Roche believes it can win significant share from Novartis and Pfizer's injectables. In phase 2 trials, Octreolin reduced growth hormone production by 80%,  and the company expects results from phase 3 could come by year end. If Chiasma's drug is eventually approved, Roche's Genentech will leverage its large oncology sales force to pitch the drug in the U.S., putting significant pressure on both Novartis and Pfizer's sales force.

The Foolish final take
Novartis isn't alone in trying to reduce the risk to long standing blockbuster drugs from generics. And there is a risk Signifor won't win FDA approval for the indication prior to Sandostatin losing patent protection. But Signifor's current status as an approved drug for treating Cushing's does suggest the FDA is comfortable with the drug, and trial results seem to suggest Signifor outperforms Sandostatin, making for a compelling case. As a result, the bigger risk to Novartis may not be Signifor's approval for the indication, or Pfizer's ability to win share from Sandostatin, but instead the potential all-oral Octreolin being developed by Roche and Chiasma. That means you should pay close attention to Octreolin's upcoming phase 3 results.

Another big growth stock to watch
This incredible tech stock is growing twice as fast as Google and Facebook, and more than three times as fast as and Apple. Watch our jaw-dropping investor alert video today to find out why The Motley Fool's chief technology officer is putting $117,238 of his own money on the table, and why he's so confident this will be a huge winner in 2013 and beyond. Just click here to watch!

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2717048, ~/Articles/ArticleHandler.aspx, 9/30/2016 6:16:25 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 9 hours ago Sponsored by:
DOW 18,143.45 -195.79 -1.07%
S&P 500 2,151.13 -20.24 -0.93%
NASD 5,269.15 -49.39 -0.93%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/29/2016 4:02 PM
NVS $79.25 Down -1.97 -2.43%
Novartis CAPS Rating: ****
PFE $33.32 Down -0.67 -1.97%
Pfizer CAPS Rating: ****
RHHBY $31.01 Down -0.56 -1.77%
Roche Holding Ltd.… CAPS Rating: *****