Replies to post #29903 on Biotech Values

[DewDiligence]

NVS Leapfrogs MRK with Galvus Submission in EU

http://online.wsj.com

>>
By Hans Schoemaker
Dow Jones Newswires;

ZURICH (Dow Jones)--Novartis AG (NVS) Thursday said it has filed its diabetes drug Galvus for approval in the European Union, a move that comes earlier than analysts had expected and puts it a step ahead of the competition.

The Basel, Switzerland-based pharmaceutical, one of the largest in the world, said that it has filed its DPP-IV inhibitor for the treatment of type 2 diabetes with the European Committee for Medicinal Products for Human Use, part of the European Medicines Agency, in an apparent tit-for-tat with Merck & Co (MRK), which has a similar drug, Januvia, in the regulatory stream.

Galvus and Januvia, if approved, could be the first in a new class of oral treatments for type 2 diabetes, an increasingly widespread condition linked to obesity. They both belong to a class of drugs called DPP-IV inhibitors, and work by enhancing the body's ability to lower blood sugar levels.

About 195 million people worldwide have diabetes, a disease characterized by high blood sugar levels that result from the body's inability to produce or use insulin.

"The E.U. filing of Galvus comes earlier than we had expected," says Karl Heinz Koch, an analyst at Lombard Odier Darier Hentsch. "Importantly, it is ahead of competing Merck's Januvia, which in a surprise move was submitted in the U.S. roughly one month ahead of Galvus (in the U.S.)."

Novartis had indicated to the market that it would file Galvus in the E.U. before the end of the year, leaving analysts to expect it to be submitted in the fourth quarter. The early filing is positive, WestLB analyst Andreas Burckhardt wrote in a note to investors. "Galvus is an important drug, helping Novartis to keep pharma sales growth in line with sector growth," he said.

Analysts' peak sales estimates for Galvus are from $1 billion to $2 billion a year, meaning it's expected to be a so-called 'blockbuster,' a drug for which sales exceed $1 billion.

With two similar DPP-IV inhibitor drugs filed with the regulators, comparisons are unavoidable.

"Given the clinical data released so far on Glavus and Januvia, we believe both drugs have a very similar profile," WestLB's Burckhardt said.

For Lombard Odier, the scale tips Novartis' way. "In our view Galvus has a superior clinical profile compared to Januvia and its database is substantially more mature," Karl Heinz Koch said, meaning substantially more clinical data is available. Koch rates the stock a buy. "Although some uncertainty remains regarding the timing of the important fixed Galvus-metformin combination Galvus should be able to develop the leading market share in this promising new drug class," Koch added.

Metformin is the generic first-line treatment for type 2 diabetes, and the most widely prescribed. Being able to market the first fixed-combination drug with metformin is seen as an important goal. A fixed-combination drug is one containing fixed amounts of two or more ingredients. Merck expects to hear from the U.S. Food and Drug Administration sometime in October, while Novartis' Galvus is likely to be approved for sale by early 2007.
<<

[DewDiligence]

NVS, MRK Maneuver for DPP-4 Hegemony

[This is an excerpt from the Oct 30 printed issue of Forbes.]

http://www.forbes.com/free_forbes/2006/1030/160.html

>>
By Robert Langreth and Matthew Herper
10.30.06

…The most intriguing new drugs are smart therapies that lower blood sugar only when patients need it, averting the dangerous drops that can occur with many other drugs. The first of this new breed is Byetta, a twice-daily shot from Amylin Pharmaceuticals (nasdaq: AMLN ) and Eli Lilly (nyse: LLY ) that both lowers blood sugar and takes off a few pounds. It was introduced in June 2005 with modest expectations but has become a hit among diabetics (including Friedman), who like the weight loss. Sales are likely to hit $500 million this year. Sales so exceeded Lilly's own projections that this summer the companies could barely keep up with demand; Lilly and Amylin had to tell doctors to stop prescribing it to new patients until a new plant came online this September. One worry is a handful of reports that Byetta may inflame the pancreas.

Both Novartis (nyse: NVS ) and Merck (nyse: MRK ) are nearing FDA approval for once-a-day pills that work in a fashion similar to Byetta, although without the promise of weight loss. While not a breakthrough, the pills appear to avoid the excessively low blood sugar and weight gain seen with some older classes of diabetes drugs. They work by inhibiting an enzyme (dipeptidyl peptidase) that gets in the way of the sugar-control process inside the body. (This convoluted chemistry is standard fare in medicine: To gain a desired effect, you inhibit something that inhibits that effect.) Merck and Novartis are likely to tout them as safer medicines that can be readily combined with other diabetes drugs such as GlaxoSmithkline's $3 billion (sales) Avandia. Novartis' entry, Galvus, "has a fantastic side-effect profile, much better than other diabetes drugs at this point in development," says Vasella, who thinks that the class could supplant older drugs. John Amatruda, head of Merck's diabetes clinical research, says his firm is "extremely excited" about how its Januvia pill stacks up against existing agents. Bristol-Myers Squibb (nyse: BMY ) and GlaxoSmithkline are testing similar drugs.

This could be the most competitive mass-market drug launch since the COX-2 anti-inflammatories Celebrex and Vioxx debuted in 1999. "Both companies have quite a bit riding on this. You can be sure they are going to go whole hog to make as big of a marketing push as possible," says Donny Wong of drug market research firm Decision Resources.

But both companies have signaled they will make this a fair fight, a restraint learned from the scandals of the overhyped COX-2 category. "They realize there is a benefit to not beating each other up. If there is a problem with the class, doctors aren't going to use either," says NYU Medical Center physician James Underberg. So far little clinical trial data for either drug have been published in peer-reviewed scientific journals, making it hard to evaluate the drugmakers' claims. Reported side effects to date include headache and coldlike symptoms for both drugs, diarrhea for Merck's entry and dizziness for Novartis'.

The new drug frenzy results from decades-old breakthroughs in understanding blood-sugar regulation. In the late 1970s Harvard Medical School researcher Joel Habener serendipitously discovered a hormone in monkfish called GLP-1 (glucagon-like peptide). It stimulated the body to secrete just the amount of insulin needed to control blood sugar, but not too much. (A relatively small overdose of insulin can put you in a coma.) Habener remembers thinking GLP-1 could be a "super-duper" drug.

Drug companies, including insulin maker Eli Lilly, thought so, too, but GLP-1 turned out to be an impractical medicine: Once injected into the body, it degrades quickly. Pharma firms also tried to make pills that mimicked its effects, with little success.

In the early 1990s endocrinologist John Eng at the VA Medical Center in the Bronx found a chemical in venomous Gila monster saliva that mimicked the effects of GLP-1. When he injected it into diabetic mice, it controlled their blood sugar all night long. He patented the compound with his own money, but the big drug companies weren't interested. When scientists from Amylin Pharmaceuticals saw Eng present his data at a 1996 diabetes conference, they ran for the phones and convinced their bosses to sign a licensing agreement. The Gila monster finding led to Byetta, a synthetic version of what is found in the lizards.

At about the same time, endocrinologist Jens Juul Holst of the University of Copenhagen figured out why GLP-1 dissolved so quickly in the body. In 1995 he and colleague Carolyn Deacon proved that the obscure dipeptidyl peptidase enzyme was the main culprit and in a paper published in the journal Diabetes suggested that drugs that blocked this enzyme would make good treatments.

The study immediately caught the eye of chemist Edwin Villhauer and his colleagues at Novartis in East Hanover, N.J. "Other companies were afraid. We jumped right in," he recalls. Villhauer took advantage of a new rapid-fire method called "combinatorial chemistry," which allowed him to brew hundreds of compounds simultaneously instead of one at a time. He quickly made 1,300 compounds, and by mid-1996 found one that blocked the enzyme. An early clinical trial found that the drug lowered blood sugar with no ugly side effects. That version needed to be given several times a day; it took Villhauer until 1998 to come up with a once-daily version.

By then the field was heating up. Merck in 2000 entered into a deal with the tiny German firm Probiodrug that was pursuing a drug to block the peptidase enzyme. But it sent lab animals into fatal multiorgan failure. "It was nasty," says Merck biologist Nancy Thornberry. Merck killed the molecule a year later. By early 2002 Thornberry had figured out that the problem was that the compound was blocking two other crucial enzymes. It turned out that her chemist colleague Ann Weber had already devised a compound called sitagliptin that spared these enzymes. They rushed it into clinical trials of 60 people in 2002. The initial safety tests showed a reassuringly clean profile. The next step would normally have been to perform a slightly larger trial on a few hundred people to confirm the drug's efficacy. But knowing it was behind Novartis, Merck gambled and moved immediately into large-scale clinical tests on more than 1,000 patients. The gamble paid off, as Merck was able to file a new-drug application six weeks before Novartis.

The next step for Merck and Novartis is to get their drugs through the FDA. That hasn't been easy lately. Last year around this time another diabetes compound, from Bristol-Myers and Merck, was on the verge of approval when cardiologists published data hinting that it caused heart attacks; the compound was dropped. Earlier this year another diabetes compound, this time from AstraZeneca (nyse: AZN ), also failed in late-stage trials because of signs of kidney toxicity. The FDA could render a verdict on Merck's Januvia by mid-October and Novartis' Galvus by December.

Analysts predict each of the drugs could reach peak annual sales of $2.5 billion. Byetta and similar injectables now in trials could bring in another $3 billion annually. But everything depends on whether the drugs' promised safety advantages hold up. After all, it wasn't too long ago that Vioxx was being pushed on the basis of its (apparently) wonderful side-effect profile.
<<

[DewDiligence]

NVS’ Galvus Gets Approvable Letter Mandating New Study

[Trading has not yet opened in Zurich, but NVS will probably be hit hard today. The delay gives MRK’s Januvia a big head start in the DPP-4 market. Perhaps NVS will have better luck in the EU, where they submitted an MAA ahead of MRK (#msg-12724932).]

http://www.novartis.com/newsroom/index.shtml

>>
26-Feb-2007, 07.15 AM CET

Novartis committed to making Galvus® available for patients with type 2 diabetes after US regulators issue 'approvable letter'

• Novartis confident in safety and efficacy of Galvus as a once-daily oral treatment for patients with type 2 diabetes, over 8,000 patients in clinical trial program

• US Food and Drug Administration (FDA) requests additional data, including a clinical study in patients with renal impairment

• Discussions to continue with the FDA to obtain final US approval for Galvus

Basel, February 26, 2007 - Novartis announced today that it has received an "approvable letter" from the US Food and Drug Administration (FDA) for Galvus® (vildagliptin), under review for US approval as a new once-daily oral treatment for patients with type 2 diabetes.

An "approvable letter" means the FDA is prepared to approve an investigational medicine and contains conditions that must be met prior to final US approval. The FDA has requested additional data, including a clinical study to demonstrate the safety and efficacy of Galvus in specific patient groups with renal (kidney) impairment.

"We are confident in the safety and efficacy of Galvus and will continue working closely with the FDA to agree on what final actions are required to obtain US approval," said James Shannon, MD, Global Head of Development at Novartis Pharma AG.

The 2007 financial outlook previously communicated in January remains unchanged for the Pharmaceuticals division and for the Group.

Galvus was submitted for US approval in January 2006 as a new therapy to reduce blood sugar levels in patients with type 2 diabetes, both as a monotherapy and in use with other anti-diabetic medicines.

The global clinical trial program to date has included over 8,000 patients, with some 5,500 treated with Galvus. Submission for European Union approval was made in August 2006.

About Novartis

Novartis AG (NYSE: NVS) is a world leader in offering medicines to protect health, cure disease and improve well-being. Our goal is to discover, develop and successfully market innovative products to treat patients, ease suffering and enhance the quality of life. We are strengthening our medicine-based portfolio, which is focused on strategic growth platforms in innovation-driven pharmaceuticals, high-quality and low-cost generics, human vaccines and leading self-medication OTC brands. Novartis is the only company with leadership positions in these areas. In 2006, the Group's businesses achieved net sales of USD 37.0 billion and net income of USD 7.2 billion. Approximately USD 5.4 billion was invested in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ approximately 101,000 associates and operate in over 140 countries around the world. For more information, please visit http://www.novartis.com.
<<