Serelaxin's demise ups the stakes on Novartis' latest Entresto-boosting moves

Novartis' Entresto has a bigger load to carry, now that serelaxin—its supposed future partner in the heart failure market—has lost out in a key trial. (Entresto)

Novartis needs Entresto to step up now more than ever. A follow-up heart failure drug, serelaxin, bombed a phase 3 trial last week, and though the Swiss drugmaker did not say it’s giving up on the med, it is likely that serelaxin is out of the running.

Once upon a time, serelaxin was seen as a $2 billion-plus drug that could help Entresto anchor a new cardiovascular franchise since Diovan, the company’s top-selling blood pressure treatment, fell victim to generic competition. Skepticism grew and those estimates dropped after an FDA rejection in 2014. As of last week, consensus sales forecasts came in at around $750 million, though some analysts still had the med in blockbuster territory.

As recently as January, however, Novartis was much more optimistic. Novartis Pharmaceuticals Chief Paul Hudson, who joined last year, said during the fourth quarter earnings call that his group was scaling up for the launch and researching potential pricing, “but if the efficacy data reveals what we think it should,” serelaxin would build to “several billion dollars” in sales.

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The data disappointed, however, and Novartis is looking at a goose egg for serelaxin. That leaves Entresto to carry the load—if it can—and as pharma-watchers know, the drug has not yet performed up to its initial billing. But it is due for a turnaround, Novartis says, thanks to payers who are increasingly receptive and a salesforce more than twice as big as it was this time last year.

“Access is better, the field force that we put in place mid-year is now up and running and we're getting a depth of prescribing that is very encouraging,” CEO Joe Jimenez said in January.

And Paul Hudson, who joined as commercial chief last year, said he spent his first six months on the job laying the groundwork “for a breakout performance” for Entresto this year.

Along the way, Novartis has been able to tout new heart failure treatment guidelines that not only backed Entresto, but advised doctors to switch patients from standard therapy to the newer drug. A study, published in the Journal of the American Medical Association, deemed Entresto to be as cost-effective as one of the standard meds, like the cheap and generic enalapril, because the expenses Entresto could prevent. The same study concluded that Entresto could save more than 28,000 lives per year in the U.S. if used in all eligible patients.

RELATED: With Entresto slowly gaining traction, Novartis launches first heart failure social network

But there are no guarantees. A growing number of drugmakers have seen their big launches stymied by payer pressure—despite data they thought were plenty strong enough to justify blockbuster sales.

Novartis itself came to market with Entresto, confident that payers would sign on, thanks to clinical trial data showing it could prevent expensive hospitalizations. That confidence was misplaced. Payers quickly raised prior authorization hurdles and saddled it with top-tier copays for patients that did win coverage.

Frustrated by the early sales figures, Novartis overhauled sales training and said it would step up the size of its sales force—a move it has followed up on since, to the point where its commercial coverage in the U.S. is now twice what it was at the beginning of 2017, Hudson said.

Meanwhile, the company has chipped away at that payer stonewalling, albeit slowly. Jimenez has championed pay-for-performance contracts with payers, and the company has managed to set up some of those deals with prominent insurers such as Aetna and Cigna.

But so far it has not been enough to significantly accelerate script growth.

RELATED: Analyst slashes Entresto sales forecast in half as skeptical heart docs hobble uptake

Hudson said more payers are lifting prior authorization requirements: 48% of commercial patients no longer face them, compared with just 28% last year and in Medicare, 26% will not have to jump that hurdle—and last year, that percentage was essentially zero.

The result is a 2017 sales estimate of $500 million. Though the first quarter is not expected to deliver much of a leap because of Medicare rebates, “we expect to finish the year very strongly,” Hudson said during the company’s fourth quarter earnings call.

According to EvaluatePharma, consensus Entresto sales forecasts (sub. req.) amount to $4.34 billion in 2022.

More broadly speaking, the serelaxin failure could undermine the credibilty of Novartis’ R&D management, as Bernstein analyst Tim Anderson wrote in a note last week. Far from delivering what execs had hinted at just two months ago, serelaxin did not hit either of its primary endpoints in the 6,500-patient Relax-AHF-2 study—which tested the med’s ability to prevent cardiovascular death and arrest worsening of heart failure in acute patients—as an add-on to standard of care.

“Serelaxin has disappointed twice—in 2014 when the FDA and EMA rejected the first filing and today with the failure of the confirmatory trial.” Anderson wrote. “Both times Novartis was loudly confident in serelaxin's chances—including at the January R&D update...and both times Novartis got it wrong.”