Novartis Pleased the Market with Its Q2 Financial Results and Pleased Us with Its Great Scientific Achievements. See Also: The Role AveXis and RegenxBio are Playing Towards the Future Success of Novartis

Novartis’ (NVS) financials results exceeded analysts’ expectations. The firm’s research institutions’ strategy, well-designed structure, plans for innovation and accurate execution led to a wealthy and competitive pipeline with more than 200 projects in clinical development. Novartis is flying into the future finding its way to more effective treatments and possible cures. As a matter of fact, Novartis is at the end of the road towards becoming a forerunner that has already put on a CAR-T immuno-oncology drug on the market and is expected to soon put also offer the clinic a gene therapy product for the treatment of spinal atrophy. Having satisfied the Market with its Q2 financial results, for us, though, more important is the advancement of its science, technologies, and products. Novartis has been granted numerous new products’ approvals during Q2, 2018. These approvals include the following: – An FDA additional approval of its CAR-T product Kymriah (tisagenlecleucel) to treat relapsing/refractory large B-cell lymphoma. The product demonstrated an overall response rate of 50%, with a median duration of response not yet reached at the time of data cut-off. In Europe, Kymriah received positive CHMP opinions for relapsed or refractory diffuse large B- cell Lymphoma (r/r DLCL) and pediatric acute lymphoblastic leukemia (pediatric ALL)   – Another approved and launched drug in the US is Aimovig (erenumab) for migraine in adults. Aimovig, is the first FDA-approved treatment to block the calcitonin gene-related peptide receptor (CGRP-R). Novartis co-commercializes Aimovig with Amgen in the US and Novartis has the exclusive rights to it outside the US, except for Japan. In Europe, Aimovig received a positive CHMP opinion during Q2. Also approved in the US and Japan was the Tafinlar+Mekinist combination for BRAF V600-mutant melanoma. The combination was also approved by the FDA for the treatment of patients with locally advanced or metastatic anaplastic thyroid cancer with BRAF V600E mutation. Gilenya (fingolimod) was approved by the FDA as the first disease-modifying therapy for pediatric relapsing multiple sclerosis. Gilenya reduced the annualized relapse rate by approximately 82% vs. interferon beta-1a injections. Promacta (eltrombopag) received FDA Priority Review for first-line treatment of severe aplastic anemia (SAA). Data from a clinical trial demonstrated 52% complete response rate and 85% overall response rate when added to standard immunosuppressive therapy. The FDA has also granted Promacta Breakthrough Therapy designation for hematopoietic sub-syndrome of acute radiation syndrome. Novartis has been granted other new approvals and accomplished many tasks, which we cannot squeeze them all in an article meant to be short. Novartis has more activities through many of its companies’ departments and through academic affiliations, which are many and increasing every year. The market celebrated Novartis’ good Q2 financial results. We try to celebrate this firm’s science, research and many achievements. Equally important is its superior and meticulous selection of the firms that it acquires.

Gene Therapy

AveXis Acquisition

Novartis acquired AveXis for $8.7 billion to improve the treatment of spinal muscular Atrophy (SMA) as a neuroscience leader. Its decision was also aimed at solidifying its position in both gene therapy research and gene therapy treatment. AVXS-101 was the lead product in AveXis’ pipeline, which the firm has developed to treat spinal muscular Atrophy. SMA is caused by a mutation in the SMN1 gene encoding for a protein that the motor nerve cells require for their survival. The SMN1 gene mutation prevents it from producing a functional SMN protein. AVXS-101 is a gene therapy designed to deliver a functional copy of the SMN1 gene to the motor neuron cells of SMA patients. AVXS-101 comprises the capsid of the adeno-associated virus (AAV) 9 that delivers a normal copy of the SMN1 gene to the brain via the bloodstream. This is important because it avoids the delivery via the spinal canal when treating infants. Once the SMN1 transgene reaches patients’ cells, it instigates its own production of SMN protein. The SMN1 transgene takes the same form as natural genes and can be activated more quickly, producing faster, more efficient therapy. AVXS-101 includes the instructions required to make the transgene production of the SMN protein sustainable. During the revelation of Novartis intention to acquire AveXis, Paul Hudson, Novartis CEO said: “Bringing AveXis on board would support both our ambition to be a leader in neurodegenerative diseases and our Neuroscience franchise priorities to strengthen our position in devastating pediatric neurological diseases such as SMA. We relish the opportunity to leverage our expertise, our 70-plus year heritage in neuroscience and our global footprint to help AVXS-101 benefit high-need SMA patients around the world.” AveXis’ pipeline comprises exclusive AAV9 gene therapy manufacturing capabilities and valuable R&D capabilities. In addition to AVXS-101, the pipeline includes products for Rett Syndrome (RTT) and a genetic form of amyotrophic lateral sclerosis (ALS) caused by mutations in the superoxide dismutase 1 (SOD1) gene. AAV9 is considered to be a clinically proven gene delivery platform for diseases of the central nervous system (CNS).

AVXS-101 Results

Initial data from the pivotal Type 1 study showed that all symptomatic patients who were enrolled in the study as of April 11, 2018, were alive and event-free. They did not need permanent ventilation. Patients enrolled in the Long Follow-Up study continued to bring good news.  Important to know that Novartis has had a successful pre-BLA meeting with the FDA prior to the H2 2018 FDA BLA submission. The basis for the BLA is the Phase I data in SMA Type 1 in addition to some data from the on-going Phase 3 STR1VE study.

Prohost Observations

This is not all that people want to know about Novartis’ flight on the wings of research towardsa highly rewarding future, which promises Novartis continued growth, a word of extreme importance for investors. We believe that Novartis is offering a real lucrative investment opportunity through its transformation and its revolutionary research and development. Another important observation is that AveXis Adeno-associated viral vectors are the major reason behind the exciting results of AveXis gene therapy product AVXS-101. The description of why these vectors are different and superior to other Adeno-associated viral vectors further highlights the value of these vectors, hence the value of the Firm that developed the gene therapy.

RegenxBio

We never forgot the firm that created the advanced safe and effective adeno-associated vector and licensed it to AveXis, which used it to construct its gene therapy pipeline, including AVXS-101 that attracted Novartis. This firm is RegenxBio (RGNX).   Bottom line: Novartis bought AveXis and we fell in love with RegenexBio. We added it to the Prohost Portfolio on May, 25, 2018 at around a $49.00 price a share. The stock has since added around $30 trading today at around $79.20. Novartis is surely in the Prohost Portfolio too. To be continued in the next issue of  "The Week in Review"