Novartis: Gilenia Clears Latest Regulatory Hurdle With Ease

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Includes: BIIB, ELN, MKGAY, MTZXF, NVS
by: EP Vantage

The phrase "medical breakthrough" is often overused and misplaced, but in Gilenia’s (fingolimod) case this is truly appropriate as it is on the verge of becoming the first oral drug to treat MS patients, up to 40% of whom are estimated to delay or refuse initial treatment with currently available injectable agents.

An FDA advisory committee yesterday issued a surprisingly unanimous recommendation to approve the Novartis (NYSE:NVS) drug, although the Swiss group is likely to keep celebrations on ice until formal approval is granted in September given the regulator’s recent unpredictability; InterMune’s (NASDAQ:ITMN) experience with pirfenidone bears testimony to this. The committee votes were surprising, given safety concerns with the drug and the fact that approval as a first line therapy was also strongly endorsed (Event – Gilenia’s safety the main focus of advisory committee, June 7, 2010). Novartis’ shares gained 3% today to SFr55.55 as multiple analysts announced major upgrades to their Gilenia forecasts, current consensus for which sits at $952m by 2016.

Plain sailing

Ahead of the advisory committee Gilenia’s efficacy was never really in doubt, a view fully endorsed by the panel of experts who voted 25-0 that the drug reduces flares in MS and 24-1 that it delays physical disability.

However, safety concerns over the drug’s link to cardiac, ophthalmic and pulmonary effects as well as skin cancer, were expected to present a real test of Gilenia’s chances of regulatory approval.

In the end these fears proved largely unfounded as the committee voted unanimously that the safety data supporting the 0.5mg dose justified approval.

The panel rejected the cancer concerns and, although the experts were in favor of more than routine monitoring of ophthalmic (macular oedema) and pulmonary (decline in lung function) safety, with the first dose of Gilenia to be administered in a monitored setting by a neurologist to screen for slowing heart rate and drop in blood pressure, these are not thought to present much of a barrier to use of the drug.

Furthermore, the committee provided a further boost to Gilenia’s prospects by voting 21-3 that the drug should be used as a first line therapy. Previously the expectations had been that Gilenia would mainly be used as a second line drug for MS patients failing on, or intolerant to, standard first line treatments with beta interferons such as Biogen Idec’s (NASDAQ:BIIB) Avonex and Merck KGaA’s (OTCPK:MKGAY) Rebif.

REMS barrier

As such, the only real barrier to approval of Gilenia in September appears to be the extent and nature of negotiations between Novartis and the FDA over suitable post-marketing safety monitoring requirements, a so-called REMS program.

As well as likely requirements to monitor cardiac, ophthalmic and pulmonary effects, the committee also recommended that further, post-approval safety data should be generated as well as studies to determine if an even lower dose of the drug at 0.25mg could be just as effective but with an improved safety profile.

Novartis has already committed to a five-year phase IV trial involving 5,000 patients so the timing of approval and nature of the REMS will depends on the extent to which the regulator agrees this trial will meet its concerns.

Breakthrough

All of which means Gilenia is set become the biggest new MS drug since Elan (NYSE:ELN) and Biogen Idec’s Tysabri was launched in 2004. Indeed bullish analysts on Gilenia point to the fact that, despite Tysabri’s PML safety scares which resulted it being temporarily taken off the market, it still managed to capture 10% of the market within two years, suggesting a high demand for novel MS therapies and significant dissatisfaction with current first line treatments.

Good news as well then for Mitsubishi Tanabe Pharma (OTC:MTZXF), which is set to receive modest royalties from Gilenia’s sales; shares in the Japanese group rose 3% today to ¥1,290.

Potentially bad news, however, for the likes of Biogen and Merck with their interferon based drugs standing with the most to lose from first-line approval for Gilenia. Biogen’s shares declined 3% to $46.70 in early trade today as the company looks set to try and defend its MS franchise by sticking to the safety line of attack on Gilenia.

A Biogen spokesperson told Bloomberg today: “The safety profile of fingolimod has yet to be established in a larger number of patients in the real-world setting.”