Zacks_Analysts' Blog : Novartis Drug Cleared in EU for SEGA - Analyst Blog

Novartis (NVS) recently received a boost when its drug Votubia was approved for the treatment of subependymal giant cell astrocytomas (SEGA), a benign brain tumor associated with tuberous sclerosis (TS) in the European Union (EU).

For the first time ever will such a medication be available in this region for the treatment of this challenging disease. Votubia is already marketed in the US under the trade name Afinitor for the disease. It is also approved in Switzerland, Brazil, Colombia, Guatemala, the Philippines and South Korea to treat SEGA associated with TS.

Earlier in June this year, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) recommended approval of Votubia for the indication. The recommendation was based on data from a mid-stage study, which showed that 9 (33%) of 27 patients experienced a SEGA tumor reduction of 50% or greater at six months relative to baseline. Also 21 of 27 patients experienced a 30% or greater reduction in the size of their largest SEGA tumor.

Upto 20% of patients with TSC get affected with SEGA, for which the only option of treatment in the EU is brain surgery. Afinitor has been doing well since the last few quarters and its approval for SEGA associated with TS in the EU will boost the top line and could help the drug achieve blockbuster status.

Afinitor is currently marketed for the treatment of advanced renal cell carcinoma (kidney cancer) after an anti-VEGF therapy like Roche’s (RHHBY) Avastin, Pfizer’s (PFE) Sutent or Onyx Pharmaceuticals’(ONXX) Nexavar in the US and EU. Afinitor is also approved for the treatment of patients with advanced neuroendocrine tumors (NET) of pancreatic origin in the US and EU.

Afinitor is also being studied for the treatment of breast cancer. In July, Novartis announced plans to file for the approval of Afinitor, for the treatment of postmenopausal women with metastatic breast cancer and whose disease has progressed, despite initial endocrine therapy in the second half of 2011. It is also under late-stage trials for many cancer types, like diffuse large B cell lymphoma, gastric cancer, hepatocellular carcinoma (HCC).

Our Recommendation

Currently, we have a Neutral recommendation on Novartis. The company carries a Zacks #3 Rank (Hold rating) in the short run. Though pleased with Novartis’ wide range of products and its efforts to diversify further, as is evident by the acquisition of eye-care company Alcon, we prefer to remain on the sidelines due to the imminent patent cliff faced by the company.