Novartis boosts forecast again as new gene therapy shines

Bloomberg

Novartis AG raised its earnings forecast for the third time this year as new drugs including gene therapy Zolgensma got off to a strong start.
Sales of the world’s most expensive drug beat analysts’ estimates with more than 100 children treated since Zolgensma’s May approval. Novartis said plans are in place covering about 90% of commercial patients and about 30% of those on the US Medicaid programme.
“There has been strong and high interest in the product across the country,” Chief Executive Officer Vas Narasimhan said on a call with reporters.
Zolgensma, a one-time treatment priced at $2.1 million, is an alternative to Biogen Inc’s Spinraza for patients with spinal muscular atrophy, a rare muscle disorder. Roughly half of Zolgensma patients have switched from the rival therapy, and Novartis expects a significant increase in the screening of newborns to drive future uptake, Narasimhan said.
The shares fell as much as 1.1% amid wider losses in European stocks, and were little changed in Zurich. The company has proposed allowing Zolgensma payments to be made over time, but implementing that has been complicated, Narasimhan said. “We have not seen material uptake of installment-based payments at all,” he said.
About 100 children with the condition are diagnosed each quarter of the year, and the company expects to provide Zolgensma to about 90 of them on average, said Dave Lennon, chief executive officer of the AveXis unit that developed the drug. Newborn screening programmes will help Novartis identify and treat more newly diagnosed patients, he said.
Most children with spinal muscular atrophy have been able to access Zolgensma through insurance, Lennon said. The company is offering refunds when the drug fails to work, and thus far no child has needed it, he said.
The drugmaker has
received additional questions on Zolgensma manufacturing from regulators in Europe and Japan, Narasimhan said. Novartis now expects a ruling from a key European committee in the first quarter of 2020 and a decision in Japan in the first half of next year.
That’s not related to an ongoing probe of how the company handled data from early studies of
Zolgensma in animals, Narasimhan said. Novartis has faced criticism it should have told regulators about the data irregularities before the drug’s US approval, and the US Food and Drug Administration has said civil and criminal penalties are possible.
Profit excluding some items is now expected to increase by a mid- to high-teens percentage this year, the drugmaker said. That follows a guidance increase at Swiss rival Roche Holding. The drugmaker also lifted its revenue outlook as sales of Piqray, a new breast cancer drug that Novartis is counting on to be a growth driver, beat estimates, along with the company’s top seller, the Cosentyx psoriasis treatment.