Novartis braces for multibillion-dollar generics hit as Gleevec copies launch

It's a dark day at Novartis ($NVS). Sun Pharma rolled out its copycat version of Novartis' blockbuster cancer drug Gleevec, setting the Swiss drugmaker up for a big hit to 2016 sales.

With $4.65 billion in 2015 revenue, the blood cancer drug is Novartis' top seller, and the company expects some serious pain from generics this year. "[W]e are going through what is the biggest patent expiration that we have seen since Diovan with Gleevec," CEO Joe Jimenez said during the company's fourth-quarter earnings call.

Diovan was Novartis' number-one product till generics hit the market in spring 2015. From $3.5 billion in 2013 sales--$1.7 billion the U.S.--Diovan has dropped to $1.3 billion, total. Novartis is expecting a $3.2 billion hit from generics this year, including Gleevec copies.

The generic erosion should be fairly gradual at first as Sun gets up to speed with its version. But after Sun's six-month exclusivity expires, Gleevec sales could take a big downturn if other generics are ready to go. Novartis is assuming that's the case, pharma chief David Epstein said during the call. "[O]ur working assumption is there will be multiple entrants after that six months," he told analysts.

One potential reprieve for Gleevec might have been the scope of Sun's generic approval. The Novartis drug boasts a laundry list of indications, and if Sun's FDA nod had been more limited, Gleevec could be protected from the worst. But the generic version has its own long list of approvals, making it a more formidable competitor than it might have been.

Gleevec generics could also dig into sales of Tasigna, the next-gen follow-up to the blockbuster med, partly because of payer pressure. "[I]t is likely that some doctors and some plans will start their new patients on generic imatinib and then wait to use Tasigna to the patient has not achieved a certain cytogenetic response," Epstein said during the call.

Novartis isn't planning an authorized generic version of Gleevec, but it does have some plans for "maximizing sales" of the brand even as the copies move in. Jimenez wouldn't say what those are, however.

Meanwhile, Sun has some of its own programs to woo patients and doctors to its version. It's taking a page from branded drugmakers' playbook with one of them: A co-pay card for privately insured patients. The discount program would limit patients' out-of-pocket on imatinib to $10 per month, the company said in a release.

It's also offering a $700 break up front for patients who need to meet their deductibles or co-insurance. The discount cards will be supplied to 4,500 U.S. oncologists, the company said.

- see the release from Sun Pharma
- check out the Q4 call transcript at Seeking Alpha

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