Twenty four hours of twists and turns has seen Novartis’ (NYSE:NVS) oncology business cleaved from the rest of the pharmaceutical division, the departure of the pharma chief, and now an early halt for efficacy of the phase III trial of its most valuable pipeline asset, LEE011.
Coming on the eve of the Asco abstract dump, when the sector’s focus is squarely on cancer drugs, the announcements were no doubt timed to raise the Swiss group’s profile in oncology. But crucially, the LEE011 announcement sets Novartis up to leapfrog Lilly in the race to launch a second CDK4/6 inhibitor in breast cancer and put up a fight against Pfizer’s (NYSE:PFE) Ibrance.
The Monaleesa-2 trial’s data safety-monitoring board (DSMB) decided that LEE011, or ribociclib, had met the primary endpoint of progression-free survival in first-line, hormone-receptor positive, oestrogen receptor-negative breast cancer. This came two months before the study’s scheduled completion, a sign that the project has pretty good odds of approval.
Novartis’s announcement contained no data beyond the decision of the DSMB, so a comparison with Ibrance cannot be made. However, this does set up a situation in which two big pharmas will be in direct competition with each other in a space that Leerink analysts reckon will be worth $10bn in 2025.
EvaluatePharma’s consensus forecasts Ibrance sales of $5.3bn in 2022, suggesting that its first-mover advantage will allow it to take a majority of the revenue – however, given the competition with ribociclib in an identical indication and drug class, the Monaleesa-2 data will be watched closely for hints of differentiation.
If little can be made, this could be a situation where competition will come down to price, something Novartis will be keen to avoid given its difficulties in getting its most recent potential blockbuster launch, Entresto, off the ground.
One area of differentiation could be tolerability. Ibrance’s dosing protocols include a one-week drug holiday after three weeks of treatment, and doses are reduced in the event of adverse events like neutropenia. Monaleesa-2 featured the same drug-holiday protocol for ribociclib, however.
While Novartis is keeping an eye on the quarry, it also must be mindful of its own chasers. Lilly (NYSE:LLY) plans to file abemaciclib in second-line disease based on phase II data, and expects its first-line phase III Monarch-3 trial to report data later this year (Watch out Ibrance – here comes abemaciclib, February 11, 2016).
A Leerink analyst, Seamus Fernandez, wrote today that an early stop of Monarch-3 or companion Monarch-2 will be necessary to “to position [abemaciclib] as a potentially best-in-class CDK4/6 inhibitor”. Crucially, these abemaciclib trials do not include a drug holiday – which could help explain why the drug’s 2020 forecast stands at $1.8bn to ribociclib’s $975m.
Novartis's separate decision to hive off oncology is billed as targeting “increased focus and improved execution” for both of the newly separated divisions.
Improved execution will be essential if the group is to retain its sway in this space; despite buying GlaxoSmithKline’s (NYSE:GSK) marketed cancer assets such as Votrient and Mekinist two years ago it will slip from number two to number four in oncology market share by 2022.
The separation of oncology is not necessarily a landmark move – as Bernstein analyst Tim Anderson put it, it is a reflection of how companies are organized anyway because of the relative complexity of cancer treatment compared with other disease areas.
Mr Anderson was more critical of Novartis over the departure of its pharma chief, David Epstein: the group has not done well at retaining senior managers, he wrote, which could lead to gaps in continuity.
Still, if Novartis is in difficulties it is still the world’s second-biggest seller of prescription drugs and looks on track to steal that title away from Pfizer in 2018 in the absence of a major megamerger. Perhaps many companies wish they had problems like Novartis.