By Denise Roland 

Novartis AG Chief Executive Vas Narasimhan has spent the past two years buying up cutting-edge science. His latest deal is a high-stakes bet that the Swiss health-care giant will succeed where many have struggled: launching a new heart drug.

Cardiovascular diseases are the number-one cause of death in the U.S., but new drugs for conditions like high cholesterol and heart failure have proven tough to sell. They compete with a bevy of older, cheaper drugs, and cardiologists typically want to see evidence that patients benefit in the long run before fully embracing them.

Novartis's own Entresto, for heart failure, has taken several years to gain widespread acceptance among cardiologists. At $1.2 billion in the nine months to September, sales still fall well short of the $5 billion a year that analysts predicted before the drug's launch.

Dr. Narasimhan is wagering that the cholesterol drug at the heart of the planned $9.7 billion acquisition of Medicines Co. will do better, predicting that it could become what he calls a "mega-blockbuster."

Investors cautiously welcomed the deal, sending shares up 1.2% Monday, the day after the companies announced the deal. Graham Parry, an analyst at Bank of America Merrill Lynch, said in a note to clients that the drug would need to hit $3 to 4 billion in peak annual sales to justify the price tag, which is a challenging goal: Two similar drugs are forecast to peak at around $2 billion a year.

The drug, inclisiran, uses an innovative approach to target a protein implicated in the buildup of cholesterol. The two similar drugs, Repatha and Praluent, that target the same protein have failed to meet analysts' expectations as insurers balked at their high price tags and threw up barriers to patients who wanted them.

Two 2017 studies sponsored by Repatha-maker Amgen Inc. found that around 80% of U.S. prescriptions for the two drugs were initially rejected by insurers, and more than 50% were rejected after appeals.

Dr. Narasimhan told analysts in a call that inclisiran can avoid those pitfalls partly thanks to differences in how pharmacy and hospital drugs are paid for in the U.S.

Inclisiran is given to patients by injection in hospitals, whereas its two rivals, taken by self-injection, are dispensed at pharmacies.

It is an important difference. Insurers can steer patients away from pricier drugs at pharmacies by imposing higher copays or heavier paperwork. They have fewer tools for controlling the use of drugs given by doctors in hospitals.

At the same time, insurers can place restrictions on the use of hospital drugs, too. One tactic, known as prior authorization, requires patients to show that cheaper therapies don't work for them before insurers grant access to newer, pricier drugs.

Insurers "can, if they want to, put some limitations in use," said Ed Schoonveld, managing partner for pharmaceutical value and access at ZS Associates, a consulting firm.

That means the success of inclisiran -- expected to go on sale in early 2021 -- will likely hinge on price.

Repatha and Praluent both went on sale at around $14,000 a year but were later reduced to $5,850 to win acceptance from insurers.

Dr. Narasimhan has said that Novartis would price inclisiran within a range deemed fair for the two similar drugs. That range, issued by the Institute for Clinical and Economic Review, a nonprofit that reviews drug prices, was $4,500 to $8,000 a year for patients at high risk of heart attacks or strokes.

The Novartis boss is also betting that physicians and patients will prefer inclisiran because it only needs to be administered twice a year, whereas Repatha and Praluent are taken once or twice a month.

Doctors hope that means fewer doses will be missed, making the drug more effective. "Even the most astute, aware patient struggles with issues of adherence or compliance," said Clyde Yancy, chief of cardiology at Northwestern University Feinberg School of Medicine in Chicago.

Cardiologists also believe inclisiran could cause fewer side effects. That is because it uses a precise technology that turns off the undesirable protein at its source, by targeting the molecular instructions for making it. Repatha and Praluent instead disable the protein once it is made. A recently published trial supported the notion of fewer side effects, but cardiologists would like to see longer-term data to be sure, according to Dr. Yancy.

Despite cardiologists' enthusiasm, some may hold off from prescribing inclisiran until longer-term data shows whether its ability to lower cholesterol also reduces the risk of a heart attack or stroke. Cardiologists, who can manage patients for many years, are typically more cautious than, say, cancer doctors who -- in dealing with what can be more immediate life-or-death situations -- are sometimes more willing to try new drugs. That in turn has pushed drugmakers to focus more on oncology.

In a survey of 50 cardiologists by investment bank Jefferies, 60% said they would wait until Medicines published the results from a long-term trial, due in 2024, before prescribing inclisiran.

Dr. Narasimhan is braced for the challenges. "We do see a few years of slow ramp and then we see significant uptake," he said. "Our Entresto ramp took a few years. We hope to do better than that."

Write to Denise Roland at Denise.Roland@wsj.com

 

(END) Dow Jones Newswires

November 29, 2019 05:44 ET (10:44 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
Novartis (NYSE:NVS)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Novartis Charts.
Novartis (NYSE:NVS)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Novartis Charts.