Novartis Reports Positive Data On Biosimilar Candidates

Novartis AG (NYSE:NVS) announced results from two key studies comparing its proposed biosimilar versions of Amgen’s AMGN blockbuster drug, Enbrel (etanercept), and Roche’s RHHBY MabThera (rituximab) to the reference drugs at the Annual European Congress of Rheumatology (EULAR 2016) in London.

Sandoz, the generic arm of Novartis, reported that both the studies met the primary endpoints of achieving pharmacokinetic (PK) bioequivalence.

While the biosimilar version of Enbrel demonstrated PK bioequivalence, with no clinically meaningful differences in safety, tolerability and immunogenicity to the reference product in a phase I study, the biosimilar version of MabThera showed PK bioequivalence and similar pharmacodynamics, safety, efficacy and immunogenicity in a phase II study.

We note that MabThera is approved for the treatment of non-Hodgkin's lymphoma, which includes follicular lymphoma and diffuse large B-cell lymphoma, chronic lymphocytic leukemia and autoimmune diseases such as rheumatoid arthritis (RA). Sandoz is seeking approval of its biosimilar in all of these indications.

Meanwhile, Enbrel is approved for moderate-to-severely active RA, chronic moderate-to-severe plaque psoriasis in patients who are candidates for systemic therapy or phototherapy, and active psoriatic arthritis. Sandoz is seeking approval for the biosimilar in all of these indications.

We are impressed by Sandoz’s efforts to broaden its biosimilars portfolio. Sandoz currently markets three biosimilars – Omnitrope, a human growth hormone; Binocrit, an erythropoiesis-stimulating agent; and Zarxio – in the U.S. Backed by its deep pipeline of biosimilars, the company plans to make 10 regulatory filings over the 2015–2017 time frame, of which six applications have already been submitted.

Sandoz's filing for a biosimilar version of Enbrel was accepted by both the FDA and the EMA for regulatory review in the fourth quarter of 2015. Last month, the EMA accepted Sandoz’s Marketing Authorisation Application (MAA) for its proposed biosimilar of MabThera.

Approval of new drugs, generics and biosimilars, along with the label expansion of existing ones, should bode well for Novartis as it has been facing stiff generic competition for some of its key drugs like Diovan and Gleevec of late. Additionally, its oncology drugs are facing competition from immuno-oncology therapies.

Novartis currently carries a Zacks Rank #4 (Sell). Currently, Pfizer (NYSE:PFE) PFE is a better-ranked stock in the health care sector, with a Zacks Rank #1 (Strong Buy).

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