Novartis slipped to number two with flat revenues in 2016 compared to 2015. However, at $48.5 billion the Basel, Switzerland-based drug maker is still a Big Pharma giant.
The major drivers behind the company’s falling revenues have
included adjustments for changes to its businesses, including its
acquisition of GlaxoSmithKline’s (GSK) Oncology business and
its divestiture of its Vaccines and Consumer Healthcare divisions
to GSK in March 2015.
Novartis started divesting its business segments in 2014. Its
Animal Health business was divested to Eli Lilly, while it divested
parts of its Vaccines business and its Consumer Healthcare business to GSK. It also divested its Influenza Vaccines business to
CSL Group. It acquired GSK’s oncology business in March 2015.
To reflect these changes and the importance of oncology to
the company following the integration of the oncology assets
acquired from GSK, during the year Novartis restructured its
Pharmaceuticals Division by creating two business units—
Novartis Pharmaceuticals and Novartis Oncology. Both units form
the Innovative Medicines Division and consists of products for
therapeutic areas including oncology, cardio-metabolic, immunology and dermatology, retinal, respiratory, neuroscience, and
established medicines. The Innovative Medicines segment reported a fall of 2% to $32.6 billion in 2016, representing 67% of
total company revenue.
Sandoz is Novartis’ generics and biosimilars division, which
includes the retail generics, anti-infectives and biopharmaceuticals franchises. It is the number two generic medicines provider
worldwide, and it’s number one in differentiated generics, including products that are difficult to develop and manufacture. In
2016, Sandoz contributed nearly 30% of total revenue at $10.14
billion, marking a 2% increase over the previous year. Alcon, the
company’s eye care unit, makes up the remaining $5.76 billion of
UPPING BIOSIMILAR STAKES
Sandoz’s revenue drivers are biopharmaceuticals, including biosimilars and Glatopa. The segment’s growth was reported across
all regions worldwide. In U.S. markets, its reported revenue for
2016 was $3.7 billion, a 1% rise. European markets reported a
7% rise in revenue to $4.4 billion, driven by strong sales in the
region. Canadian and Latin American markets reported a rise of
9% during the year.
The global sales of biopharmaceuticals rose 31% to $1 billion
in 2016. These sales included revenue from biosimilars, biopharmaceutical contract manufacturing, and Glatopa. The growth came
mainly from the three in-market biosimilars—Omnitrope (
soma-tropin), Binocrit (epoetin alfa), and Zarzio/Zarxio (filgrastim)—
along with the strong performance of Glatopa in U.S. markets.
Glatopa (glatiramer acetate) injection is the first generic version of Teva Pharmaceutical’s Copaxone 20mg used for the treatment of relapsing forms of multiple sclerosis. The segment’s anti-infective franchise reported a fall of 2% in revenue at a constant
exchange rate at $1.4 billion in 2016.
Also on the biosimilar front, Sandoz during the year acquired
from Pfizer the rights for the development and commercializa-
tion of PF-06438179 (biosimilar infliximab) in the 28 countries
that form the European Economic Area (EEA). Infliximab is a
tumor necrosis factor alpha (TNF-alpha) inhibitor used to treat
a range of autoimmune diseases including rheumatoid arthritis
(RA) and psoriasis.
Sandoz also advanced its biosimilars program with EMA acceptance of regulatory submission for its biosimilar to Amgen’s
EU-licensed Neulasta (pegfilgrastim)—a long-acting recombinant human granulocyte colony-stimulating factor (G-CSF).
Sandoz is seeking approval for the same indication as the reference product.
Novartis and Bristol-Myers Squibb (BMS) entered into a clinical research collaboration to investigate the safety, tolerability, and efficacy
of Mekinist (trametinib) in combination with Opdivo (nivolumab)
and Opdivo + Yervoy (ipilimumab) regimen as a potential treatment
option for metastatic colorectal cancer. BMS will conduct the study,
which is expected to establish recommended dose regimens and the
preliminary anti-tumor activity of the combination therapies. Both
companies will evaluate the results to determine optimal approaches and potential clinical development of these combinations.
Allergan entered into a clinical trial agreement with Novartis to
conduct a Phase IIb study, using Allergan’s cenicriviroc (CVC) and
Novartis’ lead FXR agonist for the treatment of non-alcoholic steatohepatitis (NASH). The study will assess the safety, efficacy and
tolerability of this multi-therapy treatment approach for NASH.
CVC is a once-daily, oral, Phase III ready potent immunomodula-tor that blocks two chemokine receptors, CCR2 and CCR5, which
are involved in inflammatory and fibrogenic pathways.
Novartis is developing Farnesoid X receptor (FXR) agonists
for the treatment of chronic liver diseases, including NASH. The
most advanced investigational compound is a potent, non-bile
acid FXR agonist, which recently received Fast Track designation
from the FDA and is in a Phase II clinical trial. As part of this
agreement, Novartis and Allergan will conduct a Phase IIb clinical trial to assess the safety, efficacy and tolerability of a multi-therapy treatment for NASH.
Novartis also entered a $225 million cardiovascular deal with
Ionis Pharmaceuticals to develop and commercialize AKCEA-APO(a)-L Rx and AKCEA-APOCIII-L Rx, novel potential therapies to treat cardiovascular disease. The partnership allows the
companies to move more rapidly to Phase III cardiovascular outcomes studies. Ionis and its subsidiary Akcea plan to conduct a
Phase II dose-ranging study for each drug, to choose the optimal
dose and evaluate alternative dose schedules, such as monthly
dosing, for the Phase III study. Following the successful comple-
Novartis headquarters in
Basel, Switzerland. The Swiss
company ranks number two in
Big Pharma sales in 2016 with
$48.5 billion of revenues.