IMS Company Profiles - Report Buyer

IMS COM PANY PRO FILES NOVARTIS
for 2010, panobinostat (LBH 589), which is be ing stud ies in cu ta ne ous T-cell lym phoma and pros tate
can cer with a fil ing planned for 2009, and midostaurin (PKC 412), a pro tein kinase in hib i tor, for acute
myeloid leu ke mia, with a fil ing planned for 2011. Novartis has a broad range of com pounds in de vel op -
ment in other ther a peu tic ar eas, such as neu rol ogy, trans plan ta tion, re spi ra tory dis eases, oph thal mol -
ogy, and in fec tious dis eases, an area that has grown in im por tance for the com pany. Other re cent
reg u la tory fil ings were the once daily long-act ing beta ag o nist indacaterol (QAB 149) in the USA and Eu -
rope for the treat ment of COPD, and the hu man monoclonal an ti body to interleukin-1 beta, ACZ 885, for
the treat ment of Cryopyrin-As so ci ated Pe ri odic Syn dromes (CAPS) in the USA and Eu rope. In 2009-10,
Novartis should also launch two new meningitis vaccines (Menveo and MenB), which could be potential
blockbusters, and the Japanese encephalitis virus vaccine, Ixiaro.
Novartis has also been build ing its po si tion in biologics, con sis tently grow ing its ca pa bil i ties and ex per tise
in the R&D of all bi o logic ther a pies, which now rep re sent 25% of the pre clin i cal re search port fo lio. In
2007, Novartis formed the Novartis Biologics Unit, to unify its core ca pa bil i ties in biologics within one
group.
In De cem ber 2008, Novartis com pleted the ac qui si tion of the pul mo nary drug de liv ery busi ness of Nektar
(USA). It ac quired spe cific pul mo nary de liv ery as sets, tech nol ogy, and in tel lec tual prop erty from Nektar
for $115 mil lion in cash. Cer tain dry pow der and liq uid pul mo nary for mu la tion and man u fac tur ing as sets
(in clud ing cap i tal equip ment and man u fac tur ing cap i tal lease ob li ga tions) have also been ac quired by
Novartis. Novartis will also take on 140 Nektar per son nel, as well as cer tain in tel lec tual prop erty and
man u fac tur ing meth ods. Man u fac tur ing and roy alty rights to tobramycin in haled pow der (In haled Tobi),
which is in phase III trials, will be transferred to Novartis.
Pat ent Is sues
• Im por tant Prod ucts at Risk
In 2007, sales of four Novartis phar ma ceu ti cal prod ucts, Lotrel, Lamisil, Trileptal and Famvir, were neg a -
tively af fected by the start of ge neric com pe ti tion in the US, which in some cases was un ex pected. These
four prod ucts had com bined 2006 an nual net sales of around $2.6 bil lion in the US. As a re sult of ge neric
com pe ti tion, com bined net sales in 2007 for these prod ucts de clined 38% to $1.6 bil lion, and de clined
sig nif i cantly fur ther in 2008 (Lotrel down 48% and Trileptal down 52%). The sharp and sig nif i cant re duc -
tion in net sales of these prod ucts had an ad verse ef fect on the 2007 re sults of op er a tions of the
Pharmaceuticals Di vi sion. Novartis re ported that the ef fect was still sig nif i cant in the first half of 2008 in
the USA, but less so in the lat ter half with growth in the Pharmaceuticals area returning.
Other Novartis pharma prod ucts that are the sub ject of on go ing US pat ent lit i ga tion in clude Femara
(breast can cer), Lescol (high cho les terol), Focalin/Ritalin LA (ADHD) and Comtan/Stalevo (Par kin son’s
dis ease). The loss of ex clu siv ity of some of these prod ucts could have a sig nif i cant ad verse ef fect on the
re sults of op er a tions of the Pharmaceuticals Di vi sion. There was a de vel op ment in the Femara lit i ga tion in
De cem ber 2008, how ever, when Novartis and Mylan en tered a set tle ment agree ment, un der which
Mylan has a pat ent li cense that will en able it to mar ket letrozole tab lets 2.5 mg prior to the ex pi ra tion of
the pat ent. Ad di tional terms of the agree ment re main un dis closed. In ad di tion, Neoral (trans plan ta tion)
and Voltaren (pain), which are still among Novartis’ top ten prod ucts and had com bined net sales of $1.8
bil lion in 2008, have al ready en coun tered ge neric com pe ti tion in many markets, which may cause sales
to decline significantly in the future.
A num ber of other ma jor prod ucts, in clud ing Diovan, Gleevec/Glivec and Zometa, could also po ten tially
face ge neric com pe ti tion in the com ing years in var i ous mar kets, par tic u larly the US and Eu rope, ei ther
due to po ten tial pat ent chal lenges or the reg u lar ex pi ra tion of pat ents. Diovan, Glivec and Zometa had
com bined net sales of $10.8 bil lion in 2008. Al though the loss of ex clu siv ity of any one of these three
prod ucts could have a sig nif i cant ad verse ef fect on Novartis’ fi nan cial per for mance, it is the loss of Diovan
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