Novartis places $1B bet to push CLL med Arzerra into MS fray

Novartis' ($NVS) newly acquired Arzerra (ofatumumab) is up against some hefty competition in chronic lymphocytic leukemia (CLL). But the Swiss drugmaker has a plan for helping it achieve its sales potential.

The Basel-based company is forking over as much as $1 billion to GlaxoSmithKline ($GSK) for the rights to the therapy as a multiple sclerosis treatment, it said Friday, including $300 million up front and $200 million once it enters its first Phase III trial in the disease area. After acquiring the med's cancer applications in the companies' multibillion-dollar asset swap earlier this year, Novartis will now have full control of ofatumumab going forward.

Novartis is hoping the move will help it churn out more from ofatumumab than Glaxo did. In 2014, the drug netted only about $80 million of the $1.85 billion in sales the British pharma's oncology portfolio hauled in.

And with Johnson & Johnson ($JNJ) and AbbVie's ($ABBV) Imbruvica on the scene, Arzerra's CLL growth potential may be limited. At last year's ASCO conference, J&J released Phase III head-to-head data showing that in patients with relapsed leukemia, its star had bested Arzerra in progression-free survival, overall survival and overall response rate. And this year, J&J and AbbVie unveiled more data to suggest Imbruvica could succeed in a first-line setting, where Arzerra already competes with meds such as Roche's ($RHHBY) Gazyva.

But MS is a whole different ballgame--and one Novartis knows well. Its Gilenya was the first pill for the disease to hit the market, and it's been holding its own--raking in about $2.5 billion last year--despite competition from Biogen's ($BIIB) Tecfidera and Sanofi's ($SNY) Aubagio.

Gilenya could face generic competition as soon as 2019, though, so the pharma giant is hoping to have successors ready. Ofatumumab will join Phase III BAF312 in Novartis' MS pipeline, which also includes secukinumab, the interleukin-17 inhibitor already approved as next-gen psoriasis-fighter Cosentyx.

"Novartis is pleased to further reinforce our commitment to neuroscience and to add an exciting new treatment to our strong MS portfolio," pharma chief David Epstein said in a statement. "Our vision for patients with MS is to develop treatments that improve on current standards of care, meeting patients' needs at every stage of their disease with innovative and targeted drugs."

- read Novartis' release

Special Reports: The top 15 pharma companies by 2014 revenue - Novartis | The top 10 best-selling multiple sclerosis drugs of 2013 - Gilenya | Top 20 orphan drugs by 2018 - Ibrutinib

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