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Novartis' Gilenya (fingolimod) is a novel oral medication approved for the treatment of multiple sclerosis. In 2011, Gilenya recorded just under 500 million in sales with strong growth; many think Novartis (NYSE:NVS) has a potential blockbuster on its hands. But there are a few things that could derail Gilenya in its quest for blockbuster status.

Originally developed to reduce the risk of organ rejection in patients undergoing transplants, Gilenya was discovered to be effective treating multiple sclerosis. Simply put, Multiple sclerosis is a disease that causes damage in the brain and spinal cord due to inflammation. Gilenya works to limit the inflammation through a complex process, which ultimately leads to the sequester of lymphocytes.

For a variety of reasons, Novartis' investors had high hopes for Gilenya, mostly because it was the first once daily oral medication approved for the treatment of MS. Gilenya also had extremely impressive results in its clinical trials. The most impressive data showed that Gilenya significantly lowered the annual relapse rate compared to interferon beta-1a in patients with relapsing multiple sclerosis. This led analysts to predict sales approaching 3 billion a year when Gilenya was first approved.

Since its release a number of severe side effects have been reported in patients taking Gilenya. Due to the nature of the drug suppressing the immune system, it makes patients more susceptible to certain infections. Since it was "fast tracked" for approval, Gilenya had limited data on these side effects - which is why the FDA approved it on the basis of Novartis participating in its REMS program.

The REMS program helps the FDA collect data and inform health care providers about any potential serious side effects associated with new approvals. A multitude of side effects have been reported including death, PML, eye problems, and abnormal cardiovascular effects. These side effects have led to safety reviews by both the FDA and EMA and calls for restrictions by the Institute for Safe Medicine Practices.

So will Gilenya still be the blockbuster Novartis shareholders hoped for from the beginning, or will its increasing side effect profile keep it from reaching its potential. First of all, it's important to note that because of the nature in which MS is treated, almost all medications used to treat the disease are going to be associated with serious side effects.

A competing drug used for the treatment of MS, Tysarbi co-marketed by Biogen (BIIB) and Elan (ELN) was pulled from the market for over a year. It was later reintroduced under certain restrictions and had over 1 billion in sales last year with 20% year-over-year growth. However, safety concerns have already started to slow down Gilenya's growth, in January it reported its first drop in market share after 15 months of continued growth.

Personally, I don't think Gilenya's safety concerns will hurt the drug in the long run. While it does come with a serious side-effect profile, many of its competitors do as well. It is important to remember that most patients on Gilenya have relapsed on previous medications, so the choices are already limited. Physicians will have to choose between Gilenya's excellent data in reducing relapse rates and its rare, but serious side effects. Gilenya's biggest threat might not be its side effects, but from newly approved competitors. Biogen has released positive data for its oral MS drug BG-12. Two Phase III studies (DEFINE and CONFIRM) have shown that it has an excellent safety profile and is extremely effective.

Source: Novartis: What Will Be Gilenya's Fate?