Novartis AG (ADR) Boosts its Cancer Immunotherapy Presence

Here's how Novartis is staking a claim in the industry's most exciting field.

Feb 18, 2014 at 3:06PM

Despite outstanding performance over the past year from biotech and pharma, you wouldn't be alone if you think they have more room to grow. In a recent survey of over 200 buy-side health care investors conducted by BIO Industry Analysis, 87.2% believe the biotech industry is either fairly or undervalued. 81.5% are expecting 2014 to be another positive year for the major biotech indices.

^SFTR Chart

S&P 500 Pharmaceuticals, Biotechnology & Life data by YCharts

Why is the investment community buzzing for biotech? A whopping 48.1% believe the oncology field currently offers the best investment opportunities. The optimism is heavily based on promising data from ongoing immunotherapy studies being carried out by the big pharmaceutical companies. More specifically, antibodies that stop tumor cells from exploiting immune response checkpoints, like PD-1.

While Novartis (NYSE:NVS) has an exciting immunotherapy program, until recently it lacked an anti-PD-1 candidate. With the acquisition of privately held biotech start-up CoStim, Novartis has entered a race that will put it up against lead programs from both Merck (NYSE:MRK) and Bristol-Myers Squibb (NYSE:BMY).

A complementary addition
Prior to purchasing CoStim, Novartis has made some progress with chimeric antigen receptor technology (CAR-T). The lead therapy, CTL019 requires the harvesting of T-cells from a patient, then using CAR-T to reprogram them to search out and destroy tumor cells that express the CD19 protein. Once reintroduced they multiply and do an impressive job of taking out those cancer cells. In a pediatric leukemia trial, 19 of 22 patients treated with CTL019 experienced complete remissions. That's just amazing.

Novartis' acquisition announcement didn't include many specifics, but it seems CoStim has a portfolio of late-discovery stage monoclonal antibodies that target immune checkpoints. Founded about four years ago, the company has assembled compounds that block tumors from shutting down activated T-cells before they can attack. Novartis wasn't specific about the targets, except to say they include PD-1.

So far it seems that when patients treated with CTL019 relapse, the new cancerous cells do not express the targeted CD19 protein. It stands to reason that combining CAR-T with one of the newly acquired immunotherapy candidates should limit cancer's ability to develop resistance. Novartis hinted at future combination studies in the acquisition announcement. Its CAR-T program is impressive on its own, but you definitely want to keep an eye open for clinical data if it's combined with an anti PD-1 candidate.

Late to the PD-1 party
The odds of Novartis bringing an anti-PD-1 therapy to market first are extremely slim. Merck has already started a rolling Biologics License Application (BLA) for its contender, MK-3475, that it expects to complete during the first half of this year. The market is so excited about this program that this stock has outperformed the broad market despite decreases in revenue and net income last quarter.  The FDA has already given the drug a Breakthrough Therapy designation, and an approval before the end of the year might be possible. 

Even though Novartis is late to the PD-1 party, its CAR-T immunotherapy program shouldn't need to compete with Merck's lead candidate for the leukemia market. The first BLA for MK-3475 involves an advanced melanoma indication. It's in a Phase 1 trial with multiple myeloma patients, but Merck has steered it clear of leukemia.

Until recently, Bristol-Myers Squibb was largely considered the leader in the anti-PD-1 race with its candidate nivolumab. In terms of clinical testing it still is. There are six ongoing late-stage clinical trials with nivolumab, with a seventh on the way. Luckily for Novartis, none of these phase 3 studies involve leukemia patients.

Final take
Novartis might be a latecomer in the anti-PD-1 field, but its CAR-T immunotherapy program shows the company has its finger on the pulse when it comes to hitting genetically defined pathways. Although Bristol-Myers and Merck will most likely bring an anti-PD-1 therapy to the market first, Novartis is positioned to maintain a strong presence in cancer immunotherapy for the years ahead.

Novartis looks good, but...
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Cory Renauer has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers