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UPDATE 1-Barclays raises Novartis on strong Gilenya data

Fri Dec 17, 2010 10:31am EST

* MS drug widely prescribed in first months after launch

* Barclays cites data from ImpactRx

* Novartis shares outperform sector index

(Adds Novartis share price, details, background)

ZURICH, Dec 17 (Reuters) - Barclays analysts raised their Novartis (NOVN.VX) price target on Friday on the back of strong uptake data for the Swiss drugmaker's multiple sclerosis pill Gilenya, adding to upbeat sentiment for Novartis.

The Barclays analysts said Gilenya, recently launched in the United States, had 23 percent of new written prescription starts in November among neurologists, according to data from pharmaceuticals industry research firm ImpactRx.

Gilenya has won market share from rival drugs such as Biogen Idec's (BIIB.O) Tysabri and Teva Pharmaceutical Industries' (TEVA.TA) injectable drug Copaxone, the data showed.

Barclays' new price target for Novartis is 56 Swiss francs, up from 53 francs.

The analysts also said serious adverse affects from Gilenya could still emerge and it could face competition from drugs like Teva's Laquinimod. [ID:nSGE6B805Q]

The Barclays analysts are forecasting Gilenya peak sales of more than $4 billion.

The said Biogen was most exposed to the success of new oral drugs like Gilenya, while Rebif, made by EMD Serono, an affiliate of Germany's Merck KGaA (MRCG.DE) and Pfizer Inc (PFE.N), was least likely to be affected.

At 1447 GMT, Novartis shares were trading near flat at 56.60 francs, outperforming the 1 percent drop in the STOXX Europe 600 Healthcare index .SXDP.

Novartis, which this week wrapped up its buyout of eyecare group Alcon (ACL.N), is banking on specialty medicines, such as Gilenya, as well as a diversification strategy to protect it against patent expiries on big-selling medicines, like blood pressure drug Diovan. [ID:nLDE6BE045]

MS, a disabling neurological condition, can cause dizziness, fatigue, blurred or double vision and cognitive problems. It affects more than 2 million people worldwide.

A decision from the European Medicines Agency on Gilenya is expected to come within the next few weeks.

http://www.reuters.com/article/idUSLDE6BG0RZ20101217