New heart failure guidelines are still hot off the press, and already analysts are hiking their sales estimates for Novartis’ Entresto.
That’s because the guidelines make a statement few people expected: The American College of Cardiology, the American Heart Association and the Heart Failure Society of America recommend that doctors switch patients to the new drug.
“The guidelines read favorably,” Bernstein analyst Tim Anderson said in a Monday investor note. “In fact, they are about as favorable as we could have hoped for.”
Generic drugs are the current standard of care for heart failure patients, obviously much cheaper than the $4,600-per-year list price on Entresto. Payers have been reluctant to cover the new med, despite clinical data showing that it kept patients out of the hospital, saving money in the process. Plus, cardiologists had been reluctant to switch stable patients to new meds. Early sales results prompted analysts to slash their sales estimates, which once stood at $6 billion on the high end.
Now, doctors have more reason to try Entresto. Patients with chronic, symptomatic heart failure, who meet certain criteria for disease severity, should get the new med instead of the old ones “to further reduce morbidity and mortality,” the guidelines state.
Leerink Partners analyst Seamus Fernandez said his firm’s contacts in the physician community had expected a less emphatic recommendation. Because of the new guidelines, Fernandez added $1 billion to his previous 2023 sales estimate, taking his 2023 forecast to $3.6 billion.
Anderson says Bernstein forecasts 2020 sales of $2.7 billion and pegged consensus estimates at about $3.8 billion, at least before Novartis announced disappointing Q1 sales for the product. Entresto sales estimates “have been marked down substantially in recent months, given the anemic initial launch trajectory of the product,” Anderson wrote. “These new guidelines should be a relief to investors and support the idea that, while perhaps not as big as some analysts had originally hoped for, over time Entresto is still likely to become a very meaningful product.”
Novartis itself has said it’s underwhelmed by Entresto’s launch, but still maintains that it will grow to be one of its top sellers eventually. It’s now covered by most payers, albeit with prior authorization hurdles in many cases, and Novartis has successfully negotiated some pay-for-performance deals, including a results-based rebate arrangement with top U.S. insurer Cigna.
Meanwhile, the company has announced a newly expanded research program on the drug, aiming to build up more data to back Entresto’s current use and expand into other patient populations as well. Dubbed FortiHFy, the effort covers more than 40 trials.
The fact that it’s putting more money into trials shows that Novartis is both confident that the investment will pay off and cognizant of the fact that Entresto may need some additional evidence to back up its bid for market share.
Amgen's new heart failure drug Corlanor also scored a recommendation in the new guidelines, but it's not as strong as the backing for Entresto.
- see the ACC/AHA/HFSA guidelines
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