Biotech Values

[Bio_pete]

Dew, TEVA has always stated they felt competition was a bigger threat then generics & this article lends some credibility to that belief. Do these drugs impact your MNTA valuation models?


Novartis Thwarted in Oral MS Drug Race
By Lisa LaMotta Jul 28, 2010 1:20 pm

Merck KGaA gets priority review for its oral MS drug, encroaching on what was once Gilenia's exclusive territory.

Novartis (NVS) investors got some slightly irritating news Thursday when Merck KGaA announced that the FDA accepted its New Drug Application and granted it priority review for its oral multiple sclerosis treatment cladribine.

The German Merck’s entrance back into the race to put the first oral MS treatment on the market is definitely a thorn in Novartis’ side. Both companies have been developing their oral MS drugs for years and studies have shown them to both be relatively safe and effective, but Novartis has managed to slide through the US regulatory process much more smoothly than its German competitor.

After the FDA’s rejected Merck KGaA’s first try at approval of cladribine in November 2009 asking for more information, it seemed Novartis would win the race. The Swiss drugmaker pulled even further ahead in June when an expert advisory panel to the FDA gave Novartis’ Gilenia the unanimous go-ahead for approval. While the FDA isn't required to follow the opinion of these committees, it often does. The oversight agency is expected to make its final approvable decision on September 21.

(For additional reading on Gilenia, see Novartis, Merck KGaA Battle for First Oral MS Treatment.)

Novartis seemed home free; 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).

Yet, Merck KGaA’s news of a priority review means that cladribine will now be reviewed in six months instead of the standard 10 and could even be made available by the end of 2010 -- speculation is that the FDA will decide on the drug by December 8 (although that date is currently only a likelihood). This would limit Novartis’ market advantage to less than three months.

Currently, Teva and its marketing partner Sanofi-Aventis (SNY) lead the market with Copaxone, which had more than $2.8 billion in sales in 2009. Biogen's Avonex raked in more than $2 billion as well, and the other drugs in the category managed to draw sales over $1 billion each. The side effects for these drugs can often be severe and the inconvenience and pain that comes from daily injections are unwelcome to many patients. Some analysts estimate that the market could expand rapidly if an oral medication is available just adding those patients that couldn’t handle the side effects or pain of the injectibles.

The race to bring an oral MS treatment to market will be an interesting one, and will only get more interesting after the drugs have been approved. Novartis still faces plenty of hurdles beyond approval and market competition. While the advisory panel deemed Gilenia safe, many concerns were raised about side effects and the strength of the dose. It will be up to the Swiss company to allay those fears before cladribine can take hold of a piece of its market share.

Outside the US, Novartis and Merck KGaA will continue to compete; Merck is currently awaiting approval in the EU and Novartis expects a decision from the European regulatory body by the fourth quarter.
http://www.minyanville.com/businessmarkets/articles/oral-ms-treatment-novartis-cladribine-gilenia/7/28/2010/id/29347