Novartis needs new launches to keep up momentum

A strong second quarter pushed Novartis’s stock up 5% this morning, but Kymriah continues to look weak, and the jury is still out on Zolgensma.

Novartis’s rebranding as an innovative drug company is picking up steam. But the group’s CAR-T therapy Kymriah still looks like it will fall short of already modest expectations this year – and a discontinuation in chronic lymphocytic leukaemia will not help the group’s blockbuster ambitions.

And Novartis would not give concrete details on its big new launch, the spinal muscular atrophy gene therapy Zolgensma, despite being pressed repeatedly on a conference call today. The company will need these therapies, as well as other new products like Mayzent and Piqray, to do well if it wants to keep up the current momentum.

Still, a strong showing in the second quarter of 2019, when Novartis beat sales and earnings expectations and raised full-year 2019 guidance, moved the company’s stock up 5% this morning.

True, expectations were probably not high for Kymriah, which has been a commercial disappointment since its launch in 2017. Second-quarter sales of $58m were up 263%, but from a very low base, and at current rates the product will have problems hitting the already reduced EvaluatePharma sellside consensus of $237m this year.

The discontinuation in chronic lymphocytic leukaemia (CLL) could be another blow, but in reality getting a foothold in this disease, which is already well served, was always going to be a hard task for CAR-T. There are worries about whether CAR-T would be too harsh for CLL, which generally progresses slowly, and whether its cost would be justified in what is a relatively old patient population.

Novartis had not responded to questions about the reasons behind the CLL discontinuation at the time of publication, but if the decision was indeed down to concerns about CAR-T’s competitiveness it could be bad news for JCAR017. Celgene increased the CLL focus for the Juno-originated project last year, but it is unclear whether JCAR017's soon-to-be new owner, Bristol-Myers Squibb, has similar plans (Ash 2018 – The JCAR017 development path takes another twist, December 2, 2018).

A look at other CD19-targeting CAR-T assets shows several in development in CLL, but many ongoing trials involve academic institutions.

Ongoing western trials of CD19-targeting CAR-T projects in CLL
Project Trial details Sponsor Trial ID Primary completion
3rd-gen CD19 CAR-T B-cell malignancies Uppsala University NCT03068416 Apr 2019
Kymriah Imbruvica combo in r/r CLL or SLL University of Pennsylvania NCT02640209 Oct 2019
CD19 CAR-T Sagan; advanced B-Cell NHL, ALL, and CLL Baylor College of Medicine NCT01853631 Dec 2019
"Armored" CD19 CAR T CLL  Memorial Sloan Kettering/Juno NCT03085173 Mar 2020
3rd-gen CD19 CAR-T CLL, ALL, DLBCL, follicular lymphoma, mantle cell lymphoma University Hospital Heidelberg NCT03676504 Mar 2020
MB-CART19.1 CLL, ALL, B-cell lymphoma Miltenyi Biotec NCT03853616 Jul 2020
JCAR017 With/without Imbruvica in r/r CLL or SLL Juno/Celgene NCT03331198 Dec 2020
KTE-X19 Zuma-8; r/r CLL Kite/Gilead NCT03624036 Mar 2021
CD19/CD22 CAR-T ALL, B-cell leukaemia/lymphoma, NHL NCI NCT03448393 Dec 2021
CD19 CAR-T CLL, ALL, NHL, acute biphenotypic leukaemia, SLL MD Anderson Cancer Center/NCI NCT02529813 Dec 2021
CD19/CD20 CAR-T CLL or B-cell lymphoma Jonsson Comprehensive Cancer Center/NCI NCT04007029 Aug 2022
Kymriah With/without Imbruvica in CLL/SLL and DLBCL Novartis NCT03960840 Dec 2022
CD19 CAR-T CLL, NHL, ALL Fred Hutchinson Cancer Research Center/NCI NCT01865617 Apr 2029

Zolgensma is more important for Novartis now. The company said today that the launch was going well since the gene therapy’s US approval in May, but details were thin on the ground.

Novartis will provide sales data in the third quarter for Zolgensma, as well as for another recent launch, the multiple sclerosis therapy Mayzent.

Investors might have to wait even longer to get figures on the breast cancer therapy Piqray, whose uptake will depend on PIK3CA mutation testing – and Novartis said that boosting uptake of the test would be its focus this year.

Living up to expectations? Selected Novartis recent launches
Product Indication Approval date 2024e sales ($m)
Kymriah Paediatric ALL, DLBCL Aug 2017 1,009
Mayzent Multiple sclerosis Mar 2019 1,312
Piqray HR+/Her2- breast cancer with PIK3CA mutation  May 2019 821
Zolgensma Spinal muscular atrophy May 2019 1,569
Source: EvaluatePharma.

As for future readouts, all eyes are on the Paragon trial of Entresto in heart failure patients with preserved ejection fraction, slated to be presented as a late-breaker at September's European Society of Cardiology meeting in Paris.

Despite having had its abstract accepted, Novartis said this was merely a placeholder and it had not yet seen any of the Paragon data. The company believes that it can succeed where others have failed by looking at first as well as recurrent hospitalisations, but investors face a nervous wait (Upcoming events – Novartis and Miragen hope for heartening data, June 21, 2019).

The MS project ofatumumab and the asthma candidate fevipiprant will also yield pivotal data later this year. Novartis has a packed pipeline, a luxury that many other big pharma players cannot claim, but it needs to deliver.

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