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Novartis Advances Most in Three Years on Heart-Failure Study

Sept. 1 (Bloomberg) -- Novartis AG gained the most in almost three years after a study showed that an experimental heart failure drug kept more patients from dying or being hospitalized than the standard therapy, a result that may transform treatment of the disease that afflicts 26 million people worldwide.

Novartis rose 4.3 percent to close at a record 85.90 Swiss francs in Zurich, extending the stock’s increase this year to 21 percent. The gain was the biggest since Sept. 6, 2011.

In a trial involving 8,442 patients, Novartis’s LCZ696 reduced the risk of death and hospitalization because of heart failure by 20 percent, compared with enalapril, the standard therapy. The research was published Aug. 30 in the New England Journal of Medicine and presented at a conference in Barcelona.

“My reaction was, ‘Wow, are you sure?’” said David Epstein, head of Novartis’s pharmaceuticals division, in a telephone interview. “Whenever you see numbers like this you want to make sure you didn’t hear wrong. This is going to become one of our key brands. It’s clearly a multi-billion dollar opportunity,” he said, without giving a more precise sales forecast.

The result may give Basel, Switzerland-based Novartis a top-selling pill that would supersede so-called ACE inhibitors such as enalapril that have been the mainstay of heart-failure treatment for a quarter century. The drug may garner sales of as much as $8 billion a year, according to Timothy Anderson, an analyst at Sanford C. Bernstein & Co. in New York. Novartis said it plans to seek U.S. approval this year.

Treatment Economics

Heart failure is an incurable condition in which the heart is unable to pump enough blood throughout the body. It’s different from a heart attack, in which blood bringing oxygen to the heart is severely reduced or cut off completely. About 1 in 5 people will get heart failure in their lifetime, and half will not live more than five years, Epstein said.

“This disease is every bit as bad as metastatic cancer,” he said. “At a time when the world is focused on the economics of health care, when you see a drug that reduces hospitalizations so markedly, this is a drug that’s not just about helping people live longer and feel better, it could help address some of the economic issues.”

Novartis, the world’s largest drugmaker by revenue, said in March that the trial was stopped early because an interim analysis showed the drug was clearly meeting its main goal of reducing the risk of death or hospitalization. The company has been working on new medicines to replace Diovan, the blood- pressure pill that was its top seller until the drug lost patent protection in 2012.

New Combination

Novartis isn’t aware of any rivals developing similar drugs, and the company doesn’t expect competition for at least six or seven years, Epstein said. The drug has U.S. patent protection until 2026, he said.

“This means Novartis should have a long and uncluttered runway ahead of it,” Anderson, the Sanford C. Bernstein analyst, wrote in a report yesterday. Analysts at Credit Suisse Group AG raised their peak sales forecast for the drug today to $4 billion from $3 billion.

LCZ696 combines Diovan, a so-called angiotensin receptor blocker, or ARB, with a drug called sacubitril, the first in a new class of therapies that blocks an enzyme called neprilysin, taking the load off the heart and allowing the kidneys to function more normally, Epstein said. Neprilysin is an enzyme that breaks down a hormone needed for decreasing blood pressure.

The drug “may well represent a new threshold of hope for patients with heart failure,” Mariell Jessup, president of the American Heart Association, wrote in an editorial accompanying the study. The results “may apply to a wide spectrum of patients, even those who are currently receiving the best possible therapy.”

By combining sacubitril with Diovan instead of an ACE inhibitor such as enalapril, Novartis appears to have succeeded where Bristol-Myers Squibb Co. failed. Bristol-Myers developed a similar drug that was rejected by U.S. regulators in 2002 because a trial that combined it with enalapril was associated with life-threatening swelling.

New Approach

The Novartis drug was tested in patients with reduced ejection fraction, a measure of how much blood the heart is pumping. Patients receiving LCZ696 were more likely to suffer low blood pressure, though fewer patients stopped treatment because of side effects than those in the enalapril group.

LCZ696 is the end of the road for ACE inhibitors in heart failure, Epstein said.

“Any patient that has reduced ejection heart failure that’s currently on an ACE inhibitor or an ARB should be switched over to this drug once it’s approved,” he said. “ACE inhibitors will be used in other places –- they lower blood pressure, for example -- but in heart failure from what I can see here there’s no place for them any longer.”

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