Novartis, Sun Pharma enter deal for oncology drug Odomzo

Dive Brief:

  • Sun Pharma on Thursday announced it had bought Novartis' skin cancer medication Odomzo for $175 million in a move that furthered the Indian drugmaker's goal of expanding its oncology offerings.
  • Odomzo targets the hedgehog signaling pathway, which is one way the body tells an embryotic cell what function it will ultimately have. When the pathway becomes mutated or turned off, however, it can lead to cancer.
  • While Novartis has given added attention and investment to oncology products this year, notably creating a separate unit for them — selling off Odomzo's won't be a huge loss for the company. A third quarter filing indicates the drug had revenues of less than $21 million during the period.

Dive Insight:

Novartis also has bigger issues than Odomzo. The company has worked throughout the year to revive its struggling eye care business Alcon, and is dealing with generic competition (ironically, from Sun Pharma) for its hit oncology drug Gleevec. Sales for that medication in the third quarter dropped nearly 30% compared to the same period in 2015.

Sun Pharma, meanwhile, has been itching to bump up its cancer treatment portfolio amid a year of manufacturing woes. The big biopharma has notched a few wins in that respect, such as getting approval in Europe for InfuSMART, a ready-to-administer dose of gemcitabine for the treatment of various cancers.

The company has also pushed for more branded products, and inked a $293 million deal with Novartis back in March for 14 prescription drugs.

In addition to the $175 million upfront, Novartis stands to reap milestone payments.

Sun Pharma, whose fiscal year ends March 31, reported $2.06 billion in cash and cash equivalents as of that date. Most recently, the company reported $1.1 billion in gross sales for the quarter ended Sept. 30, a 13% increase from the same period in 2015.

The Food and Drug Administration approved Odomzo in mid-2015 for locally advanced basal cell carcinoma (laBCC) in patients whose cancer returned after surgery or radiation or who weren't fit to receive those types of treatments.

"Odomzo gives us an opportunity to meaningfully expand our already established branded dermatology business and support our expansion into Branded Oncology with a launched brand," Sun Pharma's Global Head of Business Development Kirti Ganorkar said in a Dec. 22 statement.

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Filed Under: Mergers and Acquisitions / Deals