Zacks_Analysts' Blog : Mixed Opinion on NVS Lung Drug - Analyst Blog

Novartis AG (NVS) recently announced that a US Food and Drug Administration (FDA) advisory committee gave a positive opinion recommending approval of only the lower 75 mcg dose, and not the higher 150 mcg dose, of QAB149 for the treatment of chronic obstructive pulmonary disease (COPD).

The advisory committee reviewed data from five phase III trials, which demonstrated that QAB149, at 75 and 150 mcg doses, significantly improved lung function versus placebo, which lasted for 24 hours. The committee voted (13-4) in favor of approving the 75 mcg dose and against (12-5) approving the 150 mcg dose as it believes the 150 mcg version does not show any incremental efficacy from the 75 mcg dose. Both the doses were, however, regarded as safe.

QAB149 is already marketed as Onbrez Breezhaler in more than 50 countries all over the world. It is available in 150 and 300 mcg doses. QAB149 will be marketed as Arcapta Neohaler in the US, if approved.

While the FDA is not required to follow the recommendation of its advisory panels, it usually does so.

Chronic obstructive pulmonary disease afflicts roughly 12 million Americans. A life threatening, progressive lung disease, COPD makes it difficult for patients to breathe and is the third leading cause of death in the US.

Our Recommendation

Currently, we have a Neutral recommendation on Novartis, which is supported by a Zacks #3 Rank (short term Hold” rating). We are pleased with Novartis’ wide range of products and its efforts to diversify further as is evident by the acquisition of a majority stake in Alcon (ACL). Novartis is looking to acquire the remaining stake in the eye-care company.  However, we prefer to remain on the sidelines due to the imminent patent cliff faced by Novartis.