The view from John Carroll
Next week, Novartis CEO Joe Jimenez will officially hand over the reins to Vas Narasimhan, a top executive at the multinational company that has scored some standout approvals during his two-year stretch running the D side of R&D. And much of his near-term grades on the big test to come will sit squarely on the fate awaiting his top picks for Phase III development projects.
Today, Novartis generally satisfied analysts with a Q4 record that indicated its big woes with Gleevec copycats are being managed as a set of new drugs — particularly Cosentyx , Kisqali and Entresto — gains market traction as their pioneering CAR-T Kymriah begins to get established. That’s allowed the company to look forward to some modest growth again, triggering a sharp 4% spike in the stock price Wednesday morning.
This year Novartis will jockey a set of drugs in a race that includes the first CGRP migraine drug approval for erenumab, allied with Amgen and a near certain winner at the FDA, with lots of competition biting on their heels.
Kymriah will also almost certainly expand its portfolio of indications, going head-to-head with an aggressive group of players at Gilead on DLBCL soon.
RTH258 (brolucizumab) is being positioned to carve out some blockbuster market territory from Regeneron’s key Eylea franchise, something that biotech is already prepping for as Regeneron hunts an OK for a quarterly injection of Eylea, looking to kick back against what will be a big advantage for Novartis with 12-week dosing. Regeneron, though, has also been hampered by the failure of its next-gen combos.
Approvals without significant revenue in the balance won’t get celebrated at Novartis under Narasimhan. Acutely aware of the challenges payers throw in the face of expensive new heart meds, the company is positioning canakinumab — the big surprise in the pipeline — for a particular slice of the tough cardio market that is likely to benefit the most patients and have the least trouble getting the drug covered.
And Cosentyx is being positioned for new indications, which will also be challenged by some heavyweights in that market.
In every single case, the star performers in Novartis’ late-stage pipeline will face either direct, head-to-head challenges or payer kickbacks — or both — either on the day they hit the market or what amounts to the day after.
So now Narasimhan, who put the company in this position as development chief, will have to prove that he can lead the marketing team toward their blockbuster goals in delivering new revenue from innovative products.
And then there’s 2019 and all the other years that the new, young CEO plans to stay at the top.
He’s off to a solid start. And no one understands the pipeline strategy at Novartis better than Vas Narasimhan. That’s something few new Big Pharma chiefs have been able to boast of over the past decade, a time of steadily shrinking ROI on multibillion dollar R&D gambles. And as a result, expectations are running very high.
Vas Narasimhan at a January 2018 news conference in Basel. Georgios Kefalas/Keystone via AP
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