|Novartis Pharma Chief David Epstein|
Pharma executives tend to be circumspect when they talk about drug launches. After all, we've seen CEOs predict big things, only to be assaulted later by a pitchfork-toting mob. Plus, there's the don't-jinx-it school of thought.
Apparently, neither worry applies to Novartis ($NVS) pharma chief David Epstein--at least when he's talking about the company's new heart failure drug LCZ696, which wowed folks at the European Society of Cardiology meeting over the weekend.
"It will possibly be the most exciting launch the company has ever had," Epstein told investors at a meeting after the LCZ696 data was released.
Here's why. Not only did LCZ696 deliver a 20% decrease in heart-related death and a 21% decrease in related hospitalizations, but the drug did so against the current standard of care, a generic drug called enalapril--not a placebo.
So, Novartis has some impressive numbers to use in making an economic case for the new drug, which will be priced far higher than its generic alternative. As Epstein told Reuters, LCZ696 would save payers money by cutting down on hospital visits. That could help justify a cost of $7 per day, which is the estimate Sanford Bernstein analysts have put on LCZ696's eventual price.
Meanwhile, the new data should be enough to persuade cardiologists to prescribe the Novartis pill over cheap generics, a Deutsche Bank physician survey found. And given the survival advantage, as co-principal investigator Milton Packer of the University of Texas told Reuters, "once this drug becomes available, it would be difficult to understand why physicians would continue to use traditional [drugs]" to treat heart failure.
No wonder analysts have pegged the drug as a quick blockbuster, with peak sales now estimated at as much as $10 billion, by Deutsche Bank. Leerink Partners analysts see annual sales at $6 billion to $8 billion, while Morgan Stanley hiked its forecast to $5 billion from $3 billion after the data release. And the launch could come soon, with an FDA filing later this year and approval by the third quarter of 2015.
And then there's the profitability factor. Epstein says Novartis isn't planning to boost the size of its sales force, because reps from other meds will be moved over to promote LCZ696, Reuters notes. Because it's targeted at congestive heart failure--treated by specialists--the number of reps required will be lower than with a primary care drug.
Already, Novartis has been priming the pump for the drug's eventual launch. Last week, the Swiss drugmaker tweeted a link to a new disease-awareness video. "The heart failure challenge" features Packer and his co-lead investigator John McMurray.
So, the folks at Novartis headquarters have plenty to celebrate today. The new drug could not only make up for sales lost to generic versions of Diovan, its top-selling blood pressure treatment. It could end up eclipsing that former blockbuster altogether.
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