By Zacks Equity Research
The approvals came on the back of positive efficacy and safety outcomes from four placebo-controlled phase III studies. The studies were conducted among adult patients suffering from AS or PsA who were biologic treatment-naïve or had an inadequate response/were intolerant to anti-tumor necrosis factor-alpha (anti-TNFs).
We note that Cosentyx is approved in the U.S. for the treatment of moderate-to-severe plaque psoriasis in adult patients who are candidates for systemic therapy or phototherapy (light therapy).
In Europe, the drug was approved for the treatment of moderate-to-severe plaque psoriasis. In Nov 2015, it was also approved for the treatment of AS and PsA.
Meanwhile, Novartis is conducting a follow-up study on patients from these trials. The company is also evaluating Cosentyx as a potential treatment for preventing radiographic progression of spinal and joint structural damage in AS and PsA patients respectively, as shown by x-ray.
We believe that approval of new drugs and label expansion of existing ones should bode well for Novartis as it has been facing stiff generic competition for some of its key drugs like Diovan. Additionally, its oncology drugs are facing competition from new immuno-oncology therapies in the market.
Moreover, its Alcon segment is facing a decline in surgical equipment sales in the U.S. and emerging markets, while Ophthalmic Pharmaceuticals is facing the threat of increased generic competition in the U.S.
Novartis currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include AstraZeneca PLC AZN, Aerie Pharmaceuticals AERI, and Corcept Therapeutics CORT. All three stocks sport a Zacks Rank #1 (Strong Buy).
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