Two late-stage clinical failures of high-value projects have not changed CEO Vas Narasimhan’s projection for Novartis over the next 10 years.
The failures of Ionis-partnered Lp(a) candidate pelacarsen and the antibody-oligonucleotide conjugate del-desiran have raised questions about Novartis’ ability to keep its revenue target—namely, 5% to 6% annual compounded growth between 2025 and 2030, and mid-single-digit long-term growth in a 10-year timeframe. But Narasimhan reassured investors and reporters on two separate calls Tuesday that nothing has changed.
“We’ve done all the modeling. We feel very comfortable with those numbers,” Narasimhan said.
At least for the near- to mid-term, Narasimhan’s confidence is rooted in several high-growth products. One of them is the BTK inhibitor Rhapsido (remibrutinib), which is approved in two forms of chronic hives and has just reported positive results in multiple sclerosis.
Citing a strong and steady U.S. launch, Novartis has increased Rhapsido’s peak sales projection in its two existing indications—chronic spontaneous urticaria and symptomatic dermographism—to $4 billion from $3 billion previously. And the company is targeting another $4 billion from relapsing multiple sclerosis following a pair of phase 3 wins, with potential future upsides from secondary progressive MS and other smaller indications.
Explaining Novartis’ calculation on the company’s third-quarter earnings call, Narasimhan pointed to Rhapsido’s “very favorable safety profile,” including no liver signals or infection imbalances, and nearly 50% fewer discontinuations due to adverse events versus Sanofi’s Aubagio.
“In multiple sclerosis, with so many options, it starts with safety,” Narasimhan said. “If you can’t demonstrate a clear, clean safety profile, understandably, neurologists will look for other options.”
Narasimhan sees several ways for Rhapsido to establish its foothold in MS. These include about 30% of treatment-naïve patients who would be open to taking an oral drug from the outset.
Among patients who initially received an anti-CD20 antibody injection, such as Roche’s blockbuster Ocrevus, and then decided to take an oral drug, Narasimhan suggested 45% in the U.S. could prefer Rhapsido, given its safety and disease control profile. As for those who were on older injectables and wish to switch to orals, Novartis aims to capture that entire segment.
To address the anti-CD20-switch market, Novartis is conducting the phase 3b Reshape trial evaluating Rhapsido in patients with relapsing MS who are stable on Ocrevus.
“Our expectation is that once an anti-CD20 manages the inflammation, particularly controlling from an MRI standpoint the overall inflammatory burden on the patient, that remibrutinib’s ability to achieve disease control […] without complete depletion of B cell antibodies" will have "advantages for patients if patients no longer want injectable therapies," Narasimhan explained.
“I think when you have patients that have been on anti-CD20s for five to eight years, there is a desire for many patients […] to get control through a safe oral medicine,” he added.
Meanwhile, prostate cancer radioligand therapy Pluvicto represents another source driving year-over-year growth for Novartis. However, as a Goldman Sachs analyst noted on Tuesday's call, Pluvicto sales in the U.S. have been flat over the past four quarters.
Narasimhan attributes the slower growth momentum to physicians’ treatment habit of cycling through androgen receptor pathway inhibitors in metastatic castration-resistant prostate cancer.
“I think we do very well after multiple rounds of cycling, and we’re trying to get earlier and earlier in the treatment paradigm,” Narasimhan said. “We do think there’s a lot more opportunity in mCRPC, but it does take time to change those physician behaviors, particularly in the community.”
A new radioactive material safety guide proposed by the U.S. Nuclear Regulatory Commission threatens to further stymie Pluvicto’s growth. The draft guide, coded DG-8070, would add hurdles for treatment facilities to release patients who’ve received the full six doses of Pluvicto. Experts have warned that the draft policy contains unrealistic mathematical assumptions that could add administrative burdens and barriers to patient access, especially in community settings.
The policy has not been finalized. For now, Novartis has not seen any changes in site behavior, and the company is working with the authorities “to continue to educate them on the appropriate standards for radiation exposure and manage that appropriately,” Narasimhan said about the proposed rule on the investor call.
“I will keep you posted if we see anything different, but at the moment, no impact from those regulations,” he said.
Even trying to go beyond one administration regimen, Novartis is exploring re-administering Pluvicto in multiple settings, the chief executive noted. The goal, he explained, is “to give physicians more confidence that they could use Pluvicto and not have to reserve it for patients who are further progressing.”
All told, for the third quarter, Novartis’ revenues rose by 4% at constant currencies to $14.5 billion, which fell 3% below analysts’ expectations, as the company continues to work through the U.S. genericization of Entresto, according to ODDO BHF. For the full year, the Swiss pharma maintained its sales outlook, expecting growth in the low single-digit range.