- Executives at Novartis AG found themselves on the defensive Thursday, after an unexpected slowdown in sales of the Swiss pharma's top new immunology drug Cosentyx sparked a stock slide and concerns from Wall Street analysts.
- Sales of Cosentyx, a key drug to the company's growth plans, totaled $580 million in the first quarter, up 35% from the same period a year ago but $35 million less than what Novartis recorded during the three months to end 2017.
- The disappointing numbers for Cosentyx overshadowed an otherwise strong quarter. Net sales grew 4% to $12.7 billion and the company confirmed its expectation that 2018 would mark a return to growing core operating income.
Worries over Cosentyx (secukinumab)'s sales performance in the first quarter are indicative of the drug's importance to Novartis' growth story.
Novartis has bet on new drugs like Cosentyx and the heart med Entresto (sacubitril/valsartan) to help it recover from the impact of generic competition to its former top-seller Gleevec (imatinib). To date, Cosentyx has more than lived up to expectations, recording one of the strongest market launches in the company's history.
That upward growth trajectory hit a roadblock in the first three months of 2018, however, as sales fell sequentially from the fourth quarter.
Novartis CEO Vas Narasimhan attributed most of that drop to the impact of pharmacies reducing drug inventory, dismissing Wall Street analysts concerns that competition from rival drugs had begun to bite.
According to Novartis, Cosentyx holds a dominant 42% share of new-to-brand prescriptions in rheumatology and a competitive 17% share in dermatology.
That contrasts with the picture painted by Johnson & Johnson, which said earlier this week that its newly launched rival Tremfya (guselkumab) accounted for a similar 17% share in new-to-brand psoriasis prescriptions. Novartis contends the J&J numbers include free drug products provided.
Novartis increased rebates on Cosentyx in the first quarter, trading some concessions on price for better patient access.
"We are already growing volume to offset the additional rebates and take a more impressive market position in the first-line setting," said Paul Hudson, head of pharmaceuticals at Novartis, on the April. 19 call.
Jitters over Cosentyx aside, other parts of Novartis' business appeared to be gathering steam. Entresto, a highly touted heart drug that has struggled, appears to have gained traction. Sales totaled $200 million and weekly new-to-brand prescriptions eclipsed 3,000 for the first time.
Oncology also posted strong numbers, rising 6% year over year as the company looks to capitalize on launches of Kisqali (ribociclib) and its CAR-T therapy Kymriah (tisagenlecleucel).
Novartis lacks an approved checkpoint inhibitor, though, and trails some of its peers in combination immuno-oncology. Narasimhan acknowledged progress from others has raised the bar for what Novartis can do, but argued the company's investment in radiopharmaceuticals and cell therapy would help diversify its portfolio.