Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Novartis' Multiple Sclerosis Drug Gilenia Poised for Approval


A panel of experts voted in June to recommend approval of the drug despite some small safety concerns, and the FDA will likely follow the decision.

On Tuesday, the landscape of the multiple sclerosis treatment sector is going to change dramatically -- at least in theory.

The FDA is set to make a decision on the approval of Novartis' (NVS) oral MS drug Gilenia by Tuesday, and in all likelihood, the drug will be approved. A panel of experts voted in June to recommend approval of the drug, despite some small safety concerns. While the FDA isn't required to follow the decisions of its panels, it often does (especially when the decision is unanimous).

Novartis is set to take a large chunk of the $11 billion multiple sclerosis market that already exists. (Analysts predict Gilenia could have sales of over $2 billion almost immediately, without any expansion to the current market.) If approved, Gilenia will be the first oral treatment for the disease that affects 2.5 million people worldwide. It will contend with injectibles from Biogen Idec (BIIB), Bayer, Merck KGaA, and Teva Pharmaceuticals (TEVA).

The one thing the Novartis drug has on its side is convenience. An oral drug would save MS patients a lot of unneeded pain and suffering caused by a daily injectible. Yet, convenience isn't enough. The drug has been proven to be more effective than a placebo, but has yet to prove itself to physicans against the tried and true treatments for the disease that are already on the market. This will be a big issue if the drug is to actually capture that $2 billion-worth of patients; it's likely that Gilenia will have a slow time penetrating the market as physicians see how effective it is compared with the injectible drugs already on the market -- like market leader Copaxone, made by Teva and Sanofi-Aventis (SNY).

Oppenheimer analysts expect that Copaxone will maintain its 40% market share and remarked in a recent investor note that Gilenia will likely be a second- or even third-line treatment as physicians assess possible side effects.

Novartis doesn't have long to put its mark on the oral MS market. The Swiss drugmaker has been battling with German pharmaceutical company Merck KGaA to get the first oral treatment to the masses and Merck isn't far behind.

In November, the FDA asked for more information from Merck KGaA regarding its MS pill cladribine. The German pharmaceutical company resubmitted the drug's application for approval with the FDA in early June. Both Gilenia and cladribine function in the same way to suppress immune system attacks on the body's own nervous system cells. If both drugs are approved, Gilenia would likely make it to market by the third quarter, while a priority review for Merck's drug would allow it to potentially come to market by the end of the year -- giving Gilenia only about three months to prove it's the superior treatment.

Novartis' challenge won't end there though. Multiple-sclerosis treatments have been notorious for setbacks after launch -- just ask Biogen Idec. The company produces two of the best-selling MS drugs, but one of its treatments, Tysabri, has been plagued by the fact that on occasion, it has caused a rare brain disease. Tysabri was considered one of the most effect treatments to date, but shortly after its launch the serious side effect became known. The company reported in August that there have been a total of 63 cases of the brain disease worldwide, including 12 fatalities. Due to this serious issue, sales of Tysabri have always been disappointing.

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.

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.

Featured Videos