Novartis wins FDA nod for newly acquired cancer drug Lutathera

Just months after picking up Advanced Accelerator Applications in a $3.9 billion buyout, Novartis is getting a quick boost with the U.S. approval for Lutathera. On Friday, the FDA approved the first-in-class med as a treatment for rare cancers of the digestive tract.

Lutathera is first the peptide receptor radionuclide therapy to win U.S. approval, according to a release from AAA. Approved to treat somatostatin receptor-positive gastroenteropancreatic neuroendocrine tumors (GEP-NETs, the drug works by binding to the receptors and then using radiation to fight cancer.

About 1 in 27,000 people in the U.S. are diagnosed with GEP-NETs each year, according to the FDA. Apple founder Steve Jobs died of the disease, according to Reuters. FDA oncology chief Dr. Richard Pazdur noted in an agency statement that patients have "limited treatment options after initial therapy fails to keep the cancer from growing."

Jefferies analysts have predicted $500 million to $1 billion in peak sales for the drug, while Baader Helvea analyst Bruno Bulic has been more optimistic. At the time of the AAA acquisition by Novartis last year, he predicted $2 billion in peak sales, according to Reuters.

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For Novartis, the approval is a boost just as its new CEO Vas Narasimhan takes the reins next week. The drugmaker purchased AAA last fall in a deal worth $3.9 billion. At the time, analysts saw the deal as logical as they said the Swiss cancer giant could fold AAA’s diagnostic offerings into its cancer business.

Even more fitting, though, is that Novartis already sells Afinitor and Sandostatin to treat neuroendocrine tumors. Sandostatin lost patent protections in 2017 but still brought in $1.6 billion last year. In purchasing the French company, Novartis noted that Lutathera beat Sandostation in a clinical trial by slashing the risk of disease progression or death by 79% compared to the Novartis drug.

The FDA approved Lutathera under its priority review program and granted the drug an orphan drug designation. The medication won its European approval back in September.