GSK deal keeps paying off for Novartis with more positive Arzerra data

Earlier this year, Novartis became the owner of a number of new oncology assets thanks to its multibillion-dollar asset swap with GlaxoSmithKline ($GSK). And Friday, it released some positive new survival data for leukemia drug Arzerra that adds to the evidence that the trade was a good one for the Swiss drugmaker.

In patients with relapsed chronic lymphocytic leukemia (CLL), adding Arzerra to fludarabine and cyclophosphamide improved progression-free survival by 54% over the two drugs on their own, according to Phase III data announced by the pharma giant. Patients receiving Arzerra as part of their cocktail went a median 28.9 months without their disease worsening, compared with 18.8 months for patients who got just the fludarabine-cyclophosphamide combo.

It's not the first good Arzerra news Novartis has gotten since sealing its deal for the drug in early March. The data follows results published in The Lancet this April that showed adding Arzerra to chemo drug chlorambucil improved progression-free survival to 22.4 months, beating out the 13.1 months that solo chlorambucil offered.

Of course, Arzerra isn't without its competition. Last year, Johnson & Johnson ($JNJ) and Pharmacyclics--now owned by AbbVie ($ABBV)--rolled out results showing their standout Imbruvica had thumped Arzerra in a head-to-head trial in patients with relapsed CLL, besting it in progression-free survival, overall survival and overall response rate. And this year, they 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.

Still, though, the positive data bodes well for Novartis, which shelled out $16 billion for GSK's cancer portfolio. And the melanoma-fighters Novartis ($NVS) picked up in the transaction--Tafinlar and Mekinist--recently succeeded in a Phase III study, too, showing a significant survival benefit as a pair over solo Tafinlar in study results released at ASCO.

"We're seeing some very important advances in this area, and we believe our portfolio stacks up extremely well," Bill Hinshaw, EVP of Novartis' U.S. oncology business, told FiercePharma this week.

On the other side, though, Glaxo has had a rougher time convincing investors and industry-watchers that unloading its cancer therapies was a good idea. It's now relying on vaccines and consumer health--traditionally lower-margin areas that it bolstered through the Novartis deal--to help it stay the course as sinking Advair sales drag its pharma unit down.

"Putting your faith in over-the-counter goods like toothpaste is a gamble," one shareholder told the Financial Times last month.

And if it doesn't work out? CEO Andrew Witty could be saying his goodbyes.  "Mr. Witty is running out of time," Liontrust Asset Management fund manager Stephen Bailey told Bloomberg in May. "He's either got to deliver in the next 12 months or step aside."

- read Novartis' release

Special Reports: Pharma's top 10 M&A deals of 2014 - GlaxoSmithKline Oncology/Novartis Vaccines (excluding flu) | The top 15 pharma companies by 2014 revenue - Novartis