Cart (0)
VIDEONovartis Benefits From Smart Decisions
Investors often wonder why Big Pharma passes on a drug; today Novartis' decision on Idenix's hep C drug was validated.
 |
|
“We have not yet received a formal letter from the FDA, nor has the Agency had an opportunity to review the safety and efficacy data from recently completed clinical trials with IDX184 and IDX320. Based upon our discussions with the Agency, we are primarily focused on three cases of elevated liver function tests observed during our drug-drug interaction study of the combination of IDX184 and IDX320 in healthy volunteers," said Idenix Chairman Jean-Pierre Sommadossi, PhD.
The company said in its announcement that there are currently no patients or healthy volunteers taking the drugs and that the three people who had experienced side effects have now returned to normal liver function. The news pushed Idenix down almost 50% in morning trading.
For Idenix this is a poor turn of events; for Novartis it’s a sign that the company has been making some wise decisions. In April 2009, Novartis passed on a partnership for the drug because of its 47% share in the company. Its stake in Idenix gives it the option to license any drug in the biotech’s pipeline. Idenix has yet to find any other company to pick up the tab.
The Swiss drugmaker has been making good decisions big and small lately. On the smaller side, Novartis plans to test a cherry-flavored version of its malaria drug Coartem in African children after studies showed that kids preferred the cherry flavor to the bitter taste of the regular pill -- a step that could lead to children getting the full dose of the drug instead of spitting it up.
Novartis has also identified a new malarial compound that could move in to the first phases of human testing after further safety testing is conducted.
As for big decisions, the Swiss pharma has recently completed an acquisition of a 77% stake in the eye-care giant Alcon (ACL). Novartis has said that it's devoted to acquiring the entire company (if it can get past some pesky minority stakeholders). Synergies will generate about $200 million for Novartis annually and the acquisition gives it access to the $6.5 billion in sales that Alcon boasts.
In other partnering news, Novartis is moving further into the iRNA sector -- an up-and-coming area that uses RNA to turn on and off genes that could control diseases. Novartis signed a partnership with Quark Pharmaceuticals in August that gives it access to a treatment for acute kidney injury in patients undergoing cardiac surgery. The deal was worth $680 million; $10 million upfront and $670 million in regulatory and commercial milestones. An upfront payment of $10 million is a small price to pay for access to a field that looks like it’s going to be the next blockbuster drug sector.
(For more on the subject, check out RNA: The New Building Blocks of Biotech Investing.)Twitter: @biowriterchik
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
