Amid antitrust probe, Novartis ties HQ raid to Cosentyx patent fight against Lilly

Swiss authorities recently raided Novartis’ headquarters in Basel as part of an anticompetition investigation. Now, we have more details about what the antitrust watchdog is looking into.

In September, the Swiss Competition Commission (COMCO) launched an investigation into Novartis’ acquisition of certain patents from Roche’s Genentech in April 2020, Novartis said in a financial report (PDF) released Tuesday.

Novartis’ enforcement tactics for those patents likely drew the authorities’ attention. Novartis used the patents against Eli Lilly and other parties, “allegedly in an attempt to protect Cosentyx from competing products,” the Swiss pharma said in a description of the case.

COMCO is examining whether Novartis’ action violates the Swiss Cartel Act, and the European Commission has also requested information from Novartis about the same subject, the company said. Novartis identified itself as the target of the raid in September but at that time only said it was about a patent around a drug for skin diseases.

“Novartis is cooperating with the authorities and will vigorously contest these allegations,” the company said in the report.

Cosentyx is currently Novartis’ best-selling drug. It generated third-quarter sales of $1.27 billion, bringing the total by September this year to $3.71 billion. The drug is among six marketed growth drivers with multibillion-dollar sales expectations.

The anti-inflammation drug is one of the leading biologics in plaque psoriasis, and Novartis just recently filed for additional FDA approval in hidradenitis suppurativa, a skin condition. Other indications Novartis is eyeing include giant cell arteritis and lupus nephritis. Novartis expects the three indications, if they eventually all pan out, to add over $2 billion in Cosentyx peak sales.

Along the way, Cosentyx is fighting off competition from Lilly’s Taltz. Both drugs are IL-17A inhibitors. Taltz, although a blockbuster drug in its own right, is so far no match to Cosentyx. In the first half of 2022, the Lilly drug raked in $1.09 billion in sales, less than half of what Cosentyx got in the same period.

In another anticompetition case from 2020, Novartis and Roche were fined €445 million by French authorities for how the companies marketed their eye med Lucentis against off-label use of Roche’s cheaper Avastin. It followed another fine from Italian authorities on the same matter. Novartis has said it is appealing those decisions.

Separately, Novartis last year had filed a lawsuit against Genentech, arguing it overpaid the Roche unit under a 2005 licensing agreement. The deal was originally signed with Chiron, which was acquired by Novartis the next year for over $5 billion. The intellectual property from Genentech is used in some Novartis biological drugs, including Cosentyx.