Zacks_Analysts' Blog : NVS' Afinitor Gets FDA Panel Backing - Analyst Blog

Novartis (NVS) recently received a positive recommendation from an advisory panel of the US Food and Drug Administration (FDA) for expanding the use of its renal cancer drug Afinitor. The approval is sought for the treatment of patients with advanced neuroendocrine tumors (NET) of pancreatic origin, a rare form of pancreatic cancer.

The positive recommendation was based on data from the RADIANT-3 trial which demonstrated that Afinitor led to a statistically significant improvement in progression-free survival versus placebo. The number of months a patient survived without the disease progressing was 11 months for a patient treated with Afinitor versus 4.6 months for a patient on placebo. The FDA is not bound to follow the panel recommendation but it usually does.

Earlier in the month Novartis amended its supplemental new drug application (sNDA) for Afinitor tablets on feedback from the FDA. Novartis was seeking approval from the US Food and Drug Administration (FDA) for the treatment of patients with advanced neuroendocrine tumors (NET) of gastrointestinal, lung or pancreatic origin. The amendment was made to focus only on patients with advanced NET of pancreatic origin.

Afinitor is currently marketed for the treatment of advanced renal cell carcinoma (RCC; kidney cancer) after treatment with an anti-VEGF therapy like Pfizer’s (PFE) Avastin, Sutent or Onyx Pharmaceuticals/Bayer’s (ONXX/BAYRY) Nexavar. Afinitor is also marketed for the treatment of subependymal giant cell astrocytomas (SEGA), a benign brain tumor associated with tuberous sclerosis (TS).

Novartis is banking on new drug approvals and successful label expansions to overcome the adverse impact of the upcoming patent cliff. However, we believe that even if the FDA approves Afinitor for advanced NET of pancreatic origin it will not be a major boost for the company as it is a much smaller population than advanced NET of gastrointestinal or lung origin for which the application was withdrawn.

Approximately 60% of pancreatic NET patients are diagnosed with the advanced form of the disease which means the cancer has spread to other parts of the body. Advanced NET is difficult to treat with the five-year survival rate for these patients being only 27%.

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 eye-care company Alcon. However, we prefer to remain on the sidelines due to the imminent patent cliff faced by Novartis.