Novartis (NVS) announced that the phase III study, INFORMS, on multiple sclerosis drug (MS) Gilenya fialed to meet the primary endpoint as it did not show a significant difference between Gilenya and placebo on a combination of disability measures.
We note that INFORMS is a double-blind, randomized, multi-center, placebo-controlled parallel group study, comparing the efficacy and safety of Gilenya (0.5 mg) versus placebo in patients suffering from primary progressive MS.
We remind investors that Gilenya is approved in the U.S. for first-line treatment of relapsing forms of MS in adults. The drug is approved in the EU for adult patients with highly active relapsing-remitting MS (RRMS).
Gilenya is one of Novartis' top-selling drugs generating over $1.8 billion in sales in the first nine months of 2014, up 29% year over year.
Hence, the failure of the study was quite disappointing as label expansion for Gilenya would have further boosted its sales. Meanwhile, Novartis is also evaluating Gilenya in pediatric MS and chronic inflammatory demyelinating polyradiculoneuropathy (CIDP) in phase III studies.
Successful development and commercialization of its pipeline is important for Novartis at this stage as it faces generic competition for several key drugs such as Gleevec, Zometa and Diovan.
Novartis, a large-cap pharma, currently carries a Zacks Rank #3 (Hold). Investors looking for better-ranked stocks in the health care sector may consider companies like Allergan (AGN), AbbVie (ABBV) and Valeant Pharmaceuticals (VRX). While Allergan carries a Zacks Rank #1 (Strong Buy), the other two carry a Zacks Rank #2 (Buy).
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