Novartis' Lead Ceritinib Could Capture Market Share From Pfizer

| About: Novartis AG (NVS)


Novartis A.G. and worldwide collaborators published results of their Phase I clinical trial of the ALK inhibitor Ceritinib (LDK378) in the New England Journal of Medicine on March 27.

Ceritinib is 20X more potent than Crizotinib, more selective, has a similar side-effect profile and offers a second chance when Crizotinib resistance develops.

Two follow-up Phase II clinical trials are fully enrolled and in progress and two more Phase III trials are currently enrolling.

In 2013, Crizotinib did $282m in sales and should do $1.2bn in 2017. Huge potential exists if Novartis’ Ceritinib can get 1st line indication against NSCLC and worldwide rights.

A 21 Center Phase I Clinical Trial of Ceritinib (LDK378), Novartis A.G. (NYSE:NVS), published its findings of patients with advanced non-small-cell lung cancer (NSCLC) in the New England Journal of Medicine on March 27, 2014. Ceritinib is a new anaplastic lymphoma kinase (NYSE:ALK) inhibitor that has been shown to possess greater anti-tumor property than Pfizer's (NYSE:PFE) Xalkori aka Crizotinib in preclinical studies of NSCLC with the ALK gene rearrangement. ALK is mutated in approximately 5-7% of all NSCLC patients or approximately 70,000-100,000 of the 1.37 million new patients diagnosed with NSCLC every year. ALK rearranged tumors depend on ALK for growth and are very susceptible to ALK inhibitors such as Ceritinib and Crizotinib. Historically Crizotinib, the only FDA approved ALK inhibitor for ALK rearranged NSCLC, has a response rate of around 60% and a median progression-free survival of 8-10 months. However many patients relapse within just 12 months due to the rapid nature with which these tumors become resistant.

Ceritinib is an ATP-competitive inhibitor of the tyrosine kinase function of ALK. In addition it is 20 times more potent than Crizotinib and significantly more specific as it inhibits insulin-like growth factor 1 at a very low level and the proto-oncogene MET not at all. In animal models Ceritinib has shown potency in both Crizotinib sensitive and resistant ALK-rearranged NSCLC tumors. Patients enrolled in the study's 21 centers had to be at least 18 yo, be active (0, 1, or 2, out of 5 on the ECOG performance score of disability, greater score indicates greater disability) demonstrate a locally advanced or metastatic NSCLC with genetic alterations in ALK. Patients could also have asymptomatic treated or untreated central nervous metastases and could have received prior treatment with an ALK inhibitor.

Patients in the dose-escalation phase were tested with Ceritinib from 50-750mg by oral administration daily. Dose limiting toxic events occurred in 6 of the 51 patients. These events included diarrhea, vomiting, dehydration, elevated alanine aminotransferase levels (liver function test), and hypophosphatemia (low blood phosphate). All of these events resolved after withdrawal of Ceritinib for 8 days or less and treatment resumed in all but one patient. The maximum tolerated dose MTD, was determined to be 750mg. Other than dose limiting events, instances of low grade side effects included nausea (82% of patients), diarrhea (75% of patients), vomiting (65% of patients), fatigue (47% of patients), and increased alanine aminotransferase levels (35% of patients).

Crizotinib has a similar side effect profile. In a recent, larger study of ~350 patients, comparing chemotherapy and Crizotinib in a Phase III Clinical Trial, the most common side effects in patients treated with Crizotinib were visual disturbances, diarrhea, and nausea. Similar to Ceritinib the authors of this study found that there were elevations of liver enzymes that are indicative of liver damage in ~38% of patients. Of more significant concern is that some patients developed interstitial lung disease which was the cause of two of the three treatment-related deaths in the Crizotinib arm of the study. This has not been seen in any data with Ceritinib.

The overall response rate (defined as tumor size regression) to the drug was 58%. That breaks down to 1% who saw complete response, 57% who saw partial response, 22% with stable disease and 11% that progressed and ~9% that had unknown response due to early withdrawal. The overall median disease progression free survival (NYSE:PFS) was 7.0 months. Of those 83 patients that had previously been treated with Crizotinib, 56% responded to Ceritinib and had a median disease progression free survival of 6.9 months. Of the 34 patients that had not previously been treated with Crizotinib, 62% responded to Ceritinib and had a median disease progression free survival of 10.4 months.

Mean progression free survival on Crizotinib is around 7.7months this is similar to Ceritinib from these data. In addition, the response rate between the two drugs is quite similar; a recent Phase III Clinical Trial with ~350 patients showed that 65% of patients responded to Crizotinib. However it is significant to note that patients who had become resistant to Crizotinib did respond to Ceritinib. In addition it is impossible to accurately compare PFS, response rate, or overall survival without looking at a head to head Phase III Trial between Crizotinib and Ceritinib.

Conclusion and Path Forward:

ALK rearranged NSCLC is diagnosed in approximately 70,000-100,000 new patients every year and makes up 5-7% of the total NSCLC diagnoses. In the US this number is around 8,000-12,000 patients but is likely to increase as more staging protocols involve genotyping tumors. In these tumors ALK is critical to their survival. Crizotinib is an effective ALK inhibitor early on but many tumors develop resistance within 12 months. Ceritinib is 20X more potent and a more specific inhibitor of ALK. Mean progression free survival on Crizotinib is around 7.7months this is similar to Ceritinib from these data. However, this was a relatively small trial with patients with advanced disease, many of whom had developed resistance to Crizotinib prior to enrolling, thus the PFS for Ceritinib is likely underestimated. Ceritinib has been shown to be safe and shown tumor response in 58% of the studied population including many patients that had previously been treated and developed resistance to Crizotinib. Ceritinib may represent a significant new option for treatment of patients that have developed resistance to Crizotinib. However this study was relatively small and the FDA will likely demand some data from the ongoing phase II and III trials comparing to Crizotinib and traditional platinum based chemotherapy before full regulatory approval occurs.

Novartis received Breakthrough Therapy Designation for Ceritinib back in March of 2013. According to the FDA, Breakthrough Therapy designation is intended to expedite the development and review of drugs that treat serious or life-threatening conditions if the therapy has demonstrated substantial improvement over an available therapy on at least one clinically significant endpoint. The designation includes all of the fast track program features, as well as more intensive FDA guidance. The Breakthrough Therapy designation is a distinct status from both accelerated approval and priority review, which can also be granted to the same drug if relevant criteria are met.

In addition, before the publication of the above results, Novartis filed for regulatory approval of Ceritinib in January and currently is supporting two Phase II trials (currently fully enrolled and in progress) and two Phase III trials (currently enrolling patients) on this drug. Pfizer's Crizotinib brought in $282m in revenue in 2013, more than double its revenue in 2012. Analysts have projected that Crizotinib could top $1.2bn in coming years especially if Pfizer can transition it from second-line after platinum based chemotherapy to a first-line indication. This is currently under review. Treatment for ALK rearranged NSCLC is an area with significant upside potential for NVS as personalized medicine for specific gene rearranged tumors is in its infancy. In all likelihood Ceritinib will acquire second-line indication for advanced NSCLC in Crizotinib resistant patients in the next 6 months and will hopefully push for head to head trials against chemotherapy and Crizotinib to support a first-line indication and earn the right to siphon a larger amount of the market share. Crizotinib is currently priced at $9,600 per month or ~$115,000 per year. Currently US new diagnoses of ALK rearranged NSCLC could provide anywhere from $960m to $1.44bn per year if ALK inhibitors became first-line treatment options. At the moment patients average 3 prior chemotherapy attempts before switching to Crizotinib. I suspect that with the ever decreasing costs of genotyping and personalized medicine more NSCLC patients will be diagnosed as ALK rearranged. The research being published today will soon make it to oncologists and rationally targeted therapeutics like Ceritinib will become the norm. Ceritinib is more potent than Crizotinib and is able to be used when Crizotinib fails, it represents a significant step forward in the treatment of ALK rearranged NSCLC and when Novartis acquires regulatory approval it can take advantage of much of the leg work Pfizer and Crizotinib have done showing superior PFS to chemotherapy.

Other companies are currently developing ALK inhibitors of their own and these include AP26113 (Phase I/II) Ariad Pharmaceuticals (NASDAQ:ARIA), ASP3026 (Phase I) Astellas Pharma Inc (TYO: 4503), Alectinib (Phase III) Hoffmann-La Roche (ROG.VX), X-396 (Phase I) Xcovery, and CH5424802 (Phase I) Chugai (TYO: 4519).


Bang YJ. The Potential for Crizotinib in Non-Small-Cell Lung Cancer: A Perspective Review. Ther Adv Med Oncol. 3(6):279-291, 2011.

Friboulet L, et al. The ALK Inhibitor Ceritinib Overcomes Crizotinib Resistance in Non-Small Cell Lung Cancer. Cancer Discovery, 2014.

Shaw AT, et al. Ceritinib in ALK-Rearranged Non-Small-Cell Lung Cancer. NEJM, 370(13):1189-1197, 2014.

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