Novartis hopes to take an early lead in a potential $10 billion market for a new type of cancer treatment called new radioligand therapy after positive results from its trials.
Novartis CEO Vas Narasimhan said the pharmaceutical company has large-scale manufacturing capabilities and relationships with hospitals, which will have to invest to adapt to deliver the treatments, leading to a “beneficial cycle” in which competitors can find harder to supplant the company’s dominance.
“We think it could be a $10 billion plus market in the next decade,” he told the Financial Times. “If you look at the cancers it could tackle, you definitely have the opportunity to go much, much bigger.”
Originally discovered by physicists at CERN, the European Organization for Nuclear Research, radioligand therapy delivers radiation to tumors through an IV, which is more focused than the blunt instrument of radiotherapy. Novartis bought the scientists’ company, Advanced Accelerator Applications, for $3.9 billion in 2018.
Narasimhan said the study results, published last month, were “quite remarkable”. In a Phase 3 trial for the treatment of prostate cancer, Novartis found that it reduced the risk of death by 38 percent, compared with standard care.
The company plans to submit the treatment to US and EU regulatory authorities for approval in the second half of the year. It will expand trials to previous treatments for prostate cancer and investigate its use against other cancers, including in the lungs and brain.
But the therapy requires a complicated infrastructure, with just-in-time delivery for the radioactive treatment and patients isolated while they receive it.
Narasimhan said he thought there could be tens or hundreds of thousands of prostate cancer patients, encouraging clinics to expand into the area.
“We think prostate cancer is going to be the unlock to really allow us to get a much broader interest,” he said.
Narasimhan has increased Novartis’ focus on innovative medicines, including the transformative yet challenging to deliver Kymriah, a cancer treatment, and Zolgensma, a gene therapy for the debilitating genetic disease spinal muscular atrophy, the world’s most expensive drug.
Rising blockbuster drug sales helped Novartis exceed expectations for second-quarter earnings and sales. Sales of Entresto, for heart failure, were up 46 percent at constant exchange rates, while Cosentyx, which treats conditions like arthritis and psoriasis, grew 21 percent.
The Swiss pharmaceutical company reported net sales of $13 billion, up 14 percent year on year and ahead of the consensus forecast of $12.5 billion. Core earnings per share were $1.66, above the average analyst estimate of $1.52. Net income was $2.9 billion.
Oncology drug revenues were up 7 percent on a constant exchange rate basis as some health systems began to approach pre-pandemic levels of cancer diagnosis, which had been disrupted by the focus on treating Covid-19 patients.
Novartis reaffirmed its full year 2021 outlook for low to mid-single digit net sales growth and mid-single digit growth in core operating income. The forecast assumes that coronavirus restrictions will be eased in the second half.
“I think health ministers are increasingly aware that ultimately in many countries there were more deaths from cardiovascular disease than from Covid, and then, in cancer, deaths approaching deaths from Covid,” he said. Narasimhan.
But he warned that the recovery from treatment could be reversed because of the “ups and downs of the Delta variant,” which is causing an increase in hospitalizations in many countries.