Study Results Boost Analyst’s Forecast for Novartis Drug

by Barry Cohen | October 4, 2011 6:00 am

Based on the results of a new study, one analyst has raised his peak sales forecast for a Novartis (NYSE:NVS[1]) cancer drug to $3.5 billion. The analyst might have been influenced by comments from the lead author of the study, who said that use of the Swiss company’s Afinitor treatment in breast cancer could be “game-changing,” according to Bloomberg.

“I don’t recall a study in this patient population that had this magnitude of an effect,” lead author Jose Baselga, a Harvard Medical School professor who also heads up hematology and oncology at Massachusetts General Hospital, told Bloomberg. Baselga called the new study the “strongest data ever seen in ER+ breast cancer,” Medscape Medical News reports.

In the study, Afinitor more than doubled progression-free survival when added to standard hormonal therapy in postmenopausal women with estrogen-receptor-positive breast cancer. The drug, which targets a specific protein in cancer cells, also cut the risk of disease progression by 57% compared with Pfizer‘s (NYSE:PFE[2]) Aromasin hormone therapy alone.

Most women with metastatic cancer treated with hormonal therapy develop resistance over time, and that resistance has been associated with the very protein that Afinitor targets, Novartis said. The protein also might be responsible for tumor-cell division, blood-vessel growth and cell metabolism. The study data on Afinitor was presented at a European cancer conference in Stockholm.

European regulators are likely to approve the drug for breast cancer based on the results of the study, said Tim Race, an analyst at Deutsche Bank AG in London who rates Novartis shares “buy.” The FDA, however, might want to see longer-term data on whether Afinitor prolongs survival, he said. Meanwhile, the company said it plans to apply for regulatory approval this year to sell Afinitor as a breast cancer treatment and expects it to be on the market in the U.S. and Europe by the end of 2012.

Afinitor already is approved in the U.S. as a treatment for cancers of the kidney and pancreas, as well as noncancerous brain tumors. Novartis also is testing the drug in patients with other types of breast cancer, as well as lymphoma and stomach and liver cancer.

If the breast cancer indication is approved, Novartis would be able to market Afinitor for four types of tumors. That would add more than $1 billion to annual sales over time, according to Herve Hoppenot, president of the company’s cancer division.

Hoppenot said more than 200,000 women worldwide have the form of breast cancer that Novartis is targeting with Afinitor. Nearly half of the women live in developed countries.

One of Baselga’s colleagues at Harvard is calling for Afinitor to be tested with women in early-stage breast cancer. Richard Gelber, a professor in biostatistics at the school, wants to see if the drug can help breast cancer patients at an earlier phase of the disease, something Novartis said it has discussed but has no plans to study at this time.

Barry Cohen is long NVS and PFE.

Endnotes:
  1. NVS: http://studio-5.financialcontent.com/investplace/quote?Symbol=NVS
  2. PFE: http://studio-5.financialcontent.com/investplace/quote?Symbol=PFE

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