Re: NVS
An assessment of NVS’ R&D webcast from September:
1. NVS does not have a lot of exciting stuff going on in oncology. Gleevec sales should begin to plateau soon, and Femara has ample competition. Hence, NVS seems to be moving from an oncology powerhouse to an also-ran. However…
2. NVS’ pipeline in the CV/diabetes/metabolic arena may be second to none. SPP100 and LAF237 could become the equivalent of David Ortiz and Manny Ramirez hitting 3rd and 4th for the Red Sox. Both drugs are slated for NDA submissions during 1H06.
3. If I were long AMLN, I’d be concerned about LAF237, which is a once daily pill and will be positioned an as adjunct to Metformin.
4. NVS intends to get as much mileage as possible from “fixed combination” pills that include at least one patented ingredient. On tap are Diovan+Norvasc (soon to be generic) and, later, Diovan+SPP100.
5. NVS predicts $4B of annual Diovan sales within the next three years. Adding in incremental sales from the Diovan+Norvasc combo pill, I think $4B is conservative.
6. The bottom line is that NVS seems to have a bright future, but it’s a different kind of future than one might have expected. Rather than being an exceptionally diversified company that does not rely unduly on any therapeutic area, the future NVS is apt to be heavily weighted toward CV/metabolic blockbusters—Diovan, SPP100, and LAF237—as well as an increasingly large role in generics. |
