Afinitor Further Improves Novartis' Position In Oncology Medication

| About: Novartis AG (NVS)

Novartis AG (NYSE:NVS) has one of the biggest drug pipelines in the pharmaceutical industry, with dozens of new drugs filing for FDA approval over the next few years. The company has a strong presence in exclusive drug markets as well as generic markets. Sandoz, its primary generic division, hedges Novartis investors well against the impending patent cliffs which spook other big pharma investors. This makes Novartis a very well-rounded bet on the healthcare industry.

One of the pharmaceutical subdivisions that Novartis excels at is in oncology (which refers to the treatment of cancer). As of now, Novartis has marketing rights to eight major drugs in the world market, targeting multiple types of cancer. A chart summarizes Novartis' product line below.

Name of Drug Used In/With Year of Inception Patent Expiry
Afinitor Renal Cell Carinoma (RCC), Subependymal Giant Cell Astrocytoma (SEGA) 2010 2016
Exjade Iron Chelation 2005 2019
Femara Breast Cancer 1997 N/A
Gleevec/ Glivec Leukemia, Gastrointestinal Stromal Tumors (GIST), Demartofibrosarcoma Protuberans 2001 2015
Proleukin Metastatic Melanoma, Metastatic Kidney Cancer 1992 N/A
Sandostatin LAR/SC Acromegaly, Neuroendocrine tumors (NET) 1991 N/A
Tasigna Leukemia 2007 ?
Zometa Multiple Myeloma (in concert with chemotherapy) 2001 Last Friday

As you can see, Novartis has enough drugs to support its growth until its pipeline begins to affect the revenue. Glivec is a blockbuster drug for blood plasma related cancers, and Novartis has the patent for the drug until 2015 (in addition, Tasigna should be its vastly superior successor, but not without competition). The focus of the rest of this article will be Novartis' newest oncology medication - Afinitor.

On Monday, September 5th, Afinitor got approval in the EU to treat a new type of cancer - advanced pancreatic neuroendocrine tumors. In clinical trials Afinitor reduced the chances of NET tumors progressing by as much as 65%, a great improvement in treating an extremely problematic type of cancer. The metabolic pathway targeted by Afinitor has never been approved before for NET tumors, so the signs are very encouraging.

This drug has also shown signs in the treatment of advanced breast cancer earlier this summer. While the drug had relatively little efficacy in many patients, it's speculated that Afinitor could increase the time breast cancer patients have before they need to begin chemotherapy. In addition, there are still unpublished results regarding the more aggressive HER2+ type of breast cancer.

Overall, Novartis AG is in a great position to treat the ever-increasing number of cancer patients out there. Afinitor has had great results in the European Union thus far, and may be able to treat more types of cancers due to its unique nature. If you were bullish on Novartis and its prospects prior to all this good news on Afinitor, this drug provides even more reason to buy shares of NVS. The shares have a reasonable P/E of 13.5 and a substantial 4.1% yield.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.