INTERVIEW: Novartis Eyes Oncology Top 3 As Glivec Nears
By CAREY SARGENT Of DOW JONES NEWSWIRES
BASEL -- Buoyed by the promise of new drugs, Swiss pharmaceutical group Novartis AG (Z.NOV) aims to clamber its way into the top three global sellers of cancer drugs by 2005, Novartis' head of oncology David Epstein told Dow Jones Newswires.
With some CHF2.5 billion in oncology sales in 2000, the Swiss pharmaceutical is currently ranked around fifth behind Bristol Myers-Squibb Co (BMY), AstraZeneca PLC (AZN), Amgen Inc. (AMGN) and Johnson & Johnson (JNJ). Epstein reckons that the Novartis unit will have to boost sales by up to 50% to be in the top three companies.
Novartis has three launches planned this year, but a key success will be Glivec, a leukemia treatment which has raced through development. Novartis is hoping Glivec won't just boost sales, but will give the company more industry clout to secure in-licensing deals in the cancer field - a $26 billion a year market.
"We're the only company with three significant launches this year - most companies are happy to have a launch every two to three years," Epstein said.
"That alone will probably get us there and some in-licensing would get us there even faster," he said.
For starters there's Femara for breast cancer and Zometa. Femara was recently approved for first line hormonal treatment of advanced breast cancer in post-menopausal women and studies have shown the drug to be more effective than the standard Tamoxifen therapy. Meanwhile, analysts reckon that Zometa could generate some CHF1.5 billion in sales by 2005.
But aside from these, Novartis has Glivec, the company's drug for a relatively rare type of cancer, chronic myeloid leukemia. It has received the most attention of the three drugs.
Glivec Fast-Tracked By FDA
Glivec was fast-tracked by the Food and Drug Administration after studies showed remarkable success rates and approval is expected later this year.
"Fast-tracking generally means a decision within 6 months, but this is going to be faster," Epstein said.
He added that while it usually takes four to five weeks for a company to get a drug out the door and onto the market after it has been approved, Novartis would do it more quickly.
"With us, it's going to be days rather than weeks to get this drug out the door. We gave ourselves tight deadlines and people were saying 'we can't do that,' but you can do it, you just have to change the rules a little."
"We're doing these things to make sure the customers get the drug as soon as possible."
The company has come up with a price, which it will likely make public in the next few weeks.
"Pricing Glivec was a tough one," Epstein said. "The indication is for a small population and the company took a significant risk in developing it. We want a fair price and need to make sure we get a reasonable return - if we were a small biotech with one product the price would be astronomical."
"We've come up with a price though - in developing it we looked at the price of other chemotherapies and CML therapies and it's not going to be inexpensive."
Epstein wouldn't comment on the price, but Merrill Lynch pharmaceutical analysts assume the company will price Glivec similar to the annual cost of interferon, currently the only other indicated treatment.
This, said Merrill Lynch, would likely see Glivec priced between $10,000-$15,000 a year. Given the estimated 50,000 patients in the U.S. and Europe, the total market potential is between $500 and $750 million a year.
Nerves About Unrealistic Glivec Hopes
Epstein made it clear however that the company is committed to making sure that CML patients get the drug.
"There's a real need for the drug and it's the right thing to do to make it available. We'll make sure people get it if there are reimbursement issues or if they just can't afford it. This could be either no cost or at dramatically reduced prices."
Asked if he was worried that the drug might not live up to expectations, he said that he wasn't worried at all about its application to CML, but did occasionally worry that people might have false hopes about its being a wonder drug.
"With the CML indication, it's as close to a miracle as you can get. I'm really not worried there," he said. "I'm a little nervous though that people might start to believe that Glivec will work for everything - people who have terminal cancer are understandably desperate."
A recent article in the New England Journal of Medicine suggested that the drug has also been found effective in treating an incurable form of gastrointestinal cancer and many may have increasing hopes that the drug will work elsewhere.
"Coverage after the New England Journal of Medicine reports came out was very good. We got around 8,000 phone calls in an hour after a program on Glivec ran on U.S. television," said Epstein.
Novartis is testing Glivec with other cancers such as prostate cancer and small-cell lung cancer, but Epstein says that the chances that the drug could work as a single agent for fighting these cancers is tiny.
"We do see some synergies in the animal testing though and current therapies are so poor anything's a great benefit," he said.
Glivec Puts Novartis On Oncology Radar
Turning to in-licensing, Epstein said, "We're always looking for in-licensing possibilities and we're talking to every biotech you can imagine."
"The question is finding something good - we need to find the gems. Because of Glivec, we're on the radar screen of just about every company now," he said.
"It used to be that Bristol Myers got all the phone calls when someone had an oncology drug to offer, but now Novartis is getting the phone calls too."
While Epstein said while the in-licensing market is tough - pharmaceuticals would all like to in-license the next blockbuster - Novartis has a good chance of getting at least some of the gems for itself.
"There are a couple of methods (of convincing a company to license their drug) - you can pay them lots of money of course, and our money is as good as anybody's," he said.
"But companies expect royalties too - they want the licensing company to get the drug to the market fast and launch it well. If you have very rapid uptake you're an attractive partner. We have credibility here."
Talking about competitors in the field, Epstein said that the current leader, Bristol-Myers Squibb, would have to fight to retain its position.
"BMS got into oncology very early and in-licensed some very toxic drugs, they have Taxol - which was their last oncology launch - losing the last bit of patent protection and they won't stay the leader unless they make a big acquisition," Epstein said.
"AstraZeneca has several high quality drugs. I think there'll be two companies vying for leadership in the field," he said.
"Novartis and AstraZeneca are the two companies that have the best chance."
-By Carey Sargent, Dow Jones Newswires, +41 1 211 6637, carey.sargent@dowjones.com
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