From 2018 to 2023, Novartis gradually became a pure-play innovative drug company: exiting the consumer health and medical device fields, splitting Alcon, Roche's equity, transferring some of the commercialization rights of ophthalmic products to Bausch & Lomb, and spun off the generic drug business Sandoz in October last year.
Recently, Novartis handed over its first report card after the spin-off of Sandoz: annual revenue of 454 in 2023US$4 billion, a year-on-year increase of 10%; Net profit 85US$7.2 billion, 62% year-on-year.
As one of the top 10 pharmaceutical companies in the world by market capitalization all year round, Novartis has not had a single product of 10 billion US dollars. However, Novartis' input and output in CGT, small nucleic acid drugs, and nuclear drugs can be regarded as track leaders.
Previously, Novartis said it focused on targeting protein degradation, cell, gene, radiation and RNA technology platforms. In the field of diseases, Novartis' latest announcements focus on cardiovascular-renal-metabolism, immunology, neuroscience, and oncology. Novartis' layout can be clearly seen in the acquisitions or introductions in the two years from 2022 to 2023. The most recent blockbuster news includes the wholly-owned acquisition of SanReno Pharma to obtain IgA nephropathy assets, and the packaged purchase of BIRINA cardiovascular assets.
Source: Novartis Investor Presentation
It is worth noting that although Novartis also began to sweep the global market because of the patent cliff problem, under the ADC acquisition frenzy, the CEO of Novartis made it clear at the JPM conference in January this year that the company has no intention of acquiring ADC assets.
Novartis CEO Narasimhan said: "We have a long history of ADC research, but we have not been successful ......To be clear, part of our focused strategy is to look for areas where we believe we can build long-term sustainable leadership, and we are investing in radioligands**.
We believe that when the right target is found, the index of radioligands will provide a fairly wide window to obtain effects without some safety concerns. ”
The safety concerns of ADCs are complex, and many ADC technology platforms are addressing the need to reduce toxicity while improving efficacy. Different ADCs have different toxicity profiles. For example, DS-8201 has a high incidence of pulmonary toxicity, and the recent Phase 3 clinical trial of Daiichi Sankyo's TROP2 ADC DATO-DXD in non-small cell lung cancer reported seven deaths from interstitial lung disease. Novartis believes that this can be avoided in radioligands**, and says that with Novartis' radioligands*** not being restricted, "radioligands** are a better option to concentrate the company's capital more rather than over-looking for ADC assets." ”
Judging from Novartis' 2023 financial report, Novartis does have the confidence not to buy ADCs. In 2023, Novartis' fastest-growing drugs in sales include: 60$3.5 billion entresto (sacubitril-valsartan sodium, **heart failure, +31%), 21$7.1 billion kesimpta (ofatumumab, multiple sclerosis type **, +99%), 20$8 billion Kisqali (reboxiclib, **HR-positive, HER2-negative breast cancer, +75%), Pluvicto (nuclear drug LU177, 9.).$800 million, ** prostate cancer, +261%), 3$5.5 billion Leqvio (Infslan, the first new siRNA antilipidemic drug targeting PCSK9, +217%) and 4$1.3 billion scemblix (the first STAMP allosteric inhibitor, ** chronic myeloid leukemia, +179%).
Data**: Novartis 2023 financial report, compiled by Arterial Network.
The $1 billion nuclear drug Pluvicto is just the beginning
Novartis' new star drug, Pluvicto, is the world's first radioligand** targeting PSMA, which was approved by the FDA on March 23, 2022 for patients with PSMA-positive metastatic castration-resistant prostate cancer (MCRPC). Just one year later, Pluvicto sales reached 9$800 million, which is about to become a "blockbuster", adding to CEO Narasimhan's strategy of "not buying ADC assets".
Pluvicto consists of combining a targeted compound with the ** radionuclide lu-177, which is structurally similar to an ADC drug. There has been a lack of advanced means in the field of mcrpc, and due to many reasons such as low tumor mutation burden and cold tumor attributes, immunity is ineffective, and pd-1 inhibitors such as drug K have not been able to overcome mcrpc.
In the previous Phase 3 VISION clinical trial, median overall survival with Pluvicto+ criteria** was 15 in patients with mCRPC3 months, compared to 113 months, and median overall survival was extended by 4 months.
Despite the limited benefits, Pluvicto has received a positive market response due to the large unmet demand. Point Pharma, a nuclear drug biotech company that Eli Lilly purchased at a premium of $1.4 billion last year, also focuses on the indication of MCRPC in its core pipeline PNT2002, which shows the potential in this field.
In October 2023, Novartis presented another positive Phase 3 data from Pluvicto: the PSMAFORE trial met the primary endpoint of progression-free survival (RPFS) with an HR of 0411, and the median RPFS in the Pluvicto group more than doubled to 12 months compared to the control group. Novartis will continue to collect OS data from PSMAFORE and is expected to submit a new marketing application in 2024, which is expected to propel Pluvicto to the first tier**.
$1 billion is just the beginning of this nuclear drug. Pluvicto was restricted last year, which affected the volume of products. In January, Novartis announced that its new radiopharmaceutical manufacturing facility in Indianapolis had received FDA approval to produce Pluvicto for commercial use. The Indianapolis facility is Novartis' second approved RLT site in the U.S., which will increase RLT production capacity to 250,000 doses per year in 2024 and beyond. In December last year, Novartis' RLT production base in China was settled in Haiyan, Zhejiang Province, and it is expected to be put into production by the end of 2026 to ** Chinese patients.
Novartis will also continue to expand its network of ** centers from the current approximately 300 facilities to approximately 500 to meet the $3 billion Pluvicto peak sales forecast.
Novartis CEO Narasimhan also noted that Novartis is developing other actinide-based compounds, which could lead to the next wave of drugs in the prostate cancer field for the company. In addition, Novartis has clinical candidates targeting FAP, GRPR and integrins to move beyond gastroenteropancreatic neuroendocrine tumors in Lutathera** and prostate cancer in Pluvicto** into a broader field of breast, colon, lung and pancreatic cancer.
Leqvio soared 217% and moved towards the first brother of small nucleic acid
The cardiovascular sector brings 63 to Novartis in 2023$9.1 billion in revenue, up 36% year-over-year. Novartis has only two marketed drugs in the cardiovascular field, one is its leading entresto, and the other is Leqvio, the first siRNA hypolipidemic drug targeting PCSK9.
Novartis introduced LeQVIO to the U.S. market in January 2022, and LeQVIO performed 1$1.2 billion, sales in 2023 3US$5.5 billion, a year-on-year increase of 217%. Leqvio is currently approved in 94 countries, thanks to which Leqvio further penetrates the market. In the fourth quarter of 2023, 3,500 institutions worldwide ordered the product, an increase of 13% compared to the third quarter.
The PCSK9 inhibitor significantly reduces low-density lipoprotein cholesterol (LDL-C) levels, and Leqvio's lead competitor is Amgen's world's first approved PCSK9 drug, Repatha. Repatha sold 11$1.7 billion became a blockbuster, growing to 12$9.6 billion, accounting for more than 70% of the market share, and will continue to sell $800 million in the first half of 2023.
One of the biggest advantages of Leqvio as a siRNA** is the semi-annual dosing interval, compared to the bi-weekly or monthly dosing frequency of Repatha. Better compliance has earned Leqvio positive market feedback, with Novartis estimating that Leqvio's future ramp-up rate can be seen in Entresto, and Evaluate Pharma expects Leqvio's sales to peak at US$3 billion.
In the past two years, Novartis has become more determined in the field of small nucleic acids. In January 2022, Novartis entered into a collaboration with small nucleic acid giant Alnylam to develop an innovative design aimed at restoring functional hepatocyte regeneration in patients with end-stage liver disease using Alnylam's proprietary siRNA technology**; In July last year, Novartis announced the acquisition of DTX Pharma for up to $1 billion**, gaining access to its proprietary Falcon platform to develop siRNAs for neuroscience indications**; Later, in August, Novartis cooperated with IONIS, a pioneer of ASO nucleic acid drugs, for the second time, and included the hypolipidemic ASO drug Pelacarten; In January this year, with a total of $4 billion, Baowang Pharmaceutical's multiple cardiovascular small nucleic acid pipelines were launched.
Novartis' posture is to occupy the "first brother" position before the tide of small nucleic acids really arrives. Among the small nucleic acid drugs on the market, Sarepta and IONIS have carved up the ASO product market, and Alnylam occupies the SIRNA market. However, as more MNCs enter, the situation in the field of small nucleic acids dominated by these three biotechs is dissolving. In the second half of 2023 alone, three small nucleic acid products from MNC have been approved: AstraZeneca's ASO**eplontersen, Novo Nordisk's RNAI**nedosiran, and Astellas's aptamer drug Izervay for geoatrophy.
However, at present, the main indications of small nucleic acid drugs are still concentrated in the field of rare diseases, and as of the first half of 2023, the highest sales of small nucleic acid drugs is Spinraza, which is 800 million US dollars, and the indication is spinal muscular atrophy. Novartis' Leqvio will bring small nucleic acid drugs into a new era: truly enter the field of common diseases, reach sales of more than $2 billion or even $3 billion, and become a new mainstream to compete with antibodies, small molecules, etc.
More diversified growth over the next five years
Source: Novartis Investor Presentation
Looking ahead to 2024 to 2028, Novartis' expansion is particularly pronounced in cardiovascular-renal-metabolic and autoimmune expansion. At the end of 2023, iPTAPAN was launched as the first oral single product for paroxysmal nocturnal hemoglobinuria (PNH), and nephropathy will become an important commercialization area for Novartis since then.
iPTAPAN is currently in the pivotal stages of research in many other complement-mediated diseases (CMD), including C3 glomerulopathy (C3G), IgA nephropathy (IgAN), lupus nephritis (LN), and cold agglutinin disease (CAD).
Four of the 10 positive Phase 3 clinical results readouts listed in Novartis' annual report were related to kidney disease. The Phase 3 ALIGN study, which included the ETA antagonist Atrasentan**Iga nephropathy, met the primary efficacy endpoint. Based on this result, Novartis plans to submit a listing application in 2024.
There is also the Chinese market. In 2023, Novartis China's sales will be US$3.3 billion, an increase of 17%, and in the annual report, Novartis also highlighted China as a key development region for the company.
Novartis has pioneered the "price for volume" of autoimmune drugs in China. In 2023, the price of secukinumab will be reduced to 870 yuan again, and about 500,000 domestic patients will choose secukinumab as the first plan, achieving almost 100% access to prefecture-level cities, hospitals and DTP pharmacies; In 2023, omalizumab was successfully renewed for the medical insurance list, and its upgraded prefilled dosage form was also successfully entered into the medical insurance, benefiting 180,000 patients in China. For pharmaceutical companies, the co-payment of medical insurance for self-exempt products that require long-term or even lifelong medication is to open up the new user market downward in the income pyramid group, and the lower it is, the larger the cross-section of the population.
In addition, Leqvio was approved in China in June last year, becoming the first siRNA drug in China, and has achieved early and steady growth in the self-funded market.
Perhaps as the market changes, Novartis' strategy on ADC assets will be adjusted, but at the moment, Novartis is indeed one of the most qualified mncs not to do ADC transactions.