Drug regulators in the U.S. and EU have accepted Novartis' (NYSE:NVS) applications to expand their approvals of ofatumumab to include patients with multiple sclerosis. The Food and Drug Administration is giving the marketing application a priority review, so a decision should come by this June. The European Medicines Agency is expected to make its decision by the second quarter of 2021.

Shareholders in Genmab (NASDAQ:GMAB), which licensed ofatumumab to Novartis in 2015, will also want to be watching for the results of these applications since Genmab will receive a 10% royalty on sales of the drug for patients with multiple sclerosis.

Ofatumumab is the active ingredient in Novartis' Arzerra, which is approved to treat chronic lymphocytic leukemia. The drug works for both leukemia and multiple sclerosis because both diseases involve the immune system, which ofatumumab inhibits through its targeting of CD20 positive B-cells.

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The application is based on two phase 3 studies, dubbed Asclepios I and II, where the pharmaceutical company showed ofatumumab reduced the annualized relapse rate by 50.5% and 58.5%, respectively, compared to Sanofi's (NASDAQ:SNY) Aubagio. Ofatumumab also suppressed the lesions associated with multiple sclerosis and reduced the risk of disability progression.

Arzerra is infused in patients with leukemia, but for multiple sclerosis, the drug can be administered by patients through a subcutaneous injection. To make it even easier on patients, Novartis has developed an autoinjector pen, which it has shown is equivalent to the pre-filled syringes used in the Asclepios studies.