Cosentyx, Entresto again drive growth at Novartis. But what about the future of Zolgensma?

The future of Novartis’ potential blockbuster spinal muscular atrophy gene therapy Zolgensma has come under question, what with a recent child death reported in the company's European trial. But Novartis doesn't seem worried, as CEO Vas Narasimhan maintained his timeline for an FDA approval next month as expected. 

His reasoning? Deaths are commonly seen in these seriously ill patients, and makers of other therapies—investigational or approved—have also witnessed deaths in their trials. So it shouldn’t be a complete surprise that Zolgensma is no exception.

On a Wednesday briefing with reporters on the company’s first-quarter earnings, Narasimhan took pains to clarify the trial death. First, SMA1 is a devastating disease, where only 8% of patients survived at the first 20 months, so deaths are common among these very sick patients, he explained.

“Within approved therapies, 23% of patients in their pivotal trials died across the course of the studies,” he said.

Secondly, while the investigator said the death might have been treatment-related, that is not necessarily the case.

“Always in situations like this when you can’t definitely prove one thing or another, the investigator is required to say there could be a potential contribution from the investigational agent,” the CEO said, adding that the trial is still going on with the current protocol.

The child was found to have five viral infections, including RSV, and eventually died of respiratory infection. And because Zolgensma is given during the phase of infection, its contribution to the disease can’t be ruled out for now, Narasimhan said.

RELATED: Novartis unveils investigation of infant's death in European Zolgensma trial

Determined that Zolgensma will eventually pass the final regulatory hurdle, Novartis has already started preparation for the launch. It’s validated infrastructure for rapid delivery, with aims to cover over 60 top centers at launch. For manufacturing, it recently bought a biologic site in Colorado from AstraZeneca to help ramp up production.

In terms of pricing, Narasimhan said it would take into account the recent analysis by the Institute for Clinical and Economic Review when pricing the therapy. The cost watchdog determined that to meet its commonly used threshold of $150,000 per quality-adjusted life year gained, Zolgensma should be priced no higher than $900,000 per treatment, while Novartis has argued the therapy is cost-effective in the range of $4 million to $5 million. As for access, Novartis has talked to more than 70 payers, covering 80% of SMA patients, and the company has said it's open to new payment methods for such costly therapies, including paying the full price in separate installments over time.

Zolgensma is one of the key new products that Novartis is counting on for future growth, but right now, it has other drugs performing well. Psoriasis therapy Cosentyx and heart failure drug Entresto helped Novartis through a strong first quarter—the last full one in which it will count Alcon’s pre-spinoff eye care business.

RELATED: Can new data give Lilly's Taltz one head start on Novartis' Cosentyx?

Cosentyx’s first-quarter sales of $791 million represented a 41% year-over-year jump at constant exchange rates and came in line with analysts’ consensus. The drug enjoyed 23% new-to-brand prescription growth in dermatology over the previous quarter. In psoriatic arthritis and ankylosing spondylitis, the rheumatology indications it’s approved in, Cosentyx has surpassed AbbVie’s megablockbuster Humira with 28% of total prescription share in the U.S. as of the end of the first quarter, Narasimhan said. More new patients are choosing the Novartis drug: It racked up a new-to-brand prescription share of 43% versus Humira's 20%, which Narasimhan said “bodes well."

Entresto’s 85% sales growth, or $357 million in total, exceeded the Street’s estimates by 9%, according to Jefferies. Entresto benefited from the Pioneer-HF trial, where it achieved a 46% reduction in serious heart failure outcomes in stabilized patients in the hospital setting.

On a separate conference call with analysts Wednesday, Narasimhan highlighted the “very promising” uptake in China in what is “arguably the best launch of a primary-care drug launch in China since 1999 when we have data available.” And that happened even without national reimbursement, which Entresto doesn't yet have. “In China alone, we expect Entresto could be a very significant medicine for the company,” he said.

Lutathera, the radiotherapy Novartis got through its acquisition of Advanced Accelerator Applications, racked up $106 million in the first quarter and was hailed as the growth driver behind the oncology business.

Based on the overall increases of 7% in sales and 18% in core operating income at constant currencies, Novartis has dialed up its core operating income outlook to high-single digits and maintained its mid-single-digit sales guidance.

RELATED: Novartis nabs GSK exec for Sandoz CEO, bringing in a familiar face—and some digital prowess

Meanwhile, as Novartis continues what Narasimhan called a multiyear transformation of generics unit Sandoz, it has found a new—but familiar—CEO for the business in Richard Saynor, currently SVP of classic and established products as well as commercial and digital platforms at GlaxoSmithKline. Before his stint at GSK, Saynor was part of commercial operations leadership at Sandoz.

Editor's Note: This story has been updated with additional comments Novartis made on a Wednesday call with analysts.