Positive Data on Novartis' LDE225 - Analyst Blog

Novartis NVS announced positive results from a phase II trial, BOLT (Basal cell carcinoma Outcomes in LDE225 Trial), on pipeline candidate LDE225 (sonidegib) at the American Society of Clinical Oncology (ASCO).

Novartis is evaluating the candidate for the treatment of patients suffering from locally advanced basal cell carcinoma (laBCC) or metastatic basal cell carcinoma (mBCC).

The results of the study showed that LDE225 showed sustained tumor shrinkage after a median follow-up of 13.9 months.

The phase II trial assessed the efficacy and safety of two oral doses of LDE225 in patients suffering from laBCC or mBCC. The primary endpoint was the objective response rate (ORR) which indicates proportion of patients with complete or partial tumor response or shrinkage, as measured by a central review committee. The study met its primary endpoint.

Novartis expects the positive data from the phase II trial to serve as the basis for worldwide regulatory filings for LDE225 for the treatment of advanced basal cell carcinoma later in 2014.

The successful development and commercialization of LDE225 will further strengthen Novartis' strong oncology portfolio.

Meanwhile, we cautiously watch Novartis' efforts to realign its portfolio in order to focus on its core business of pharmaceuticals, eye care and generics. We believe the recent acquisition of oncology products from GlaxoSmithKline GSK and divestment of Vaccines business is a step in the right direction.

Novartis also entered into a definitive agreement with Eli Lilly and Co. LLY to divest the Animal Health Division.

We are positive on Novartis' efforts to transform its portfolio. We remind investors that Novartis divested its blood transfusion diagnostics unit to Grifols S.A. for approximately $1.7 billion in cash in Jan 2014.

The acquisition of oncology products from GlaxoSmithKline and divestment of Vaccines business is a step in the right direction. It will broaden Novartis' portfolio and enable it to focus better on its core capabilities besides contributing immensely to the top line. Margins are also expected to get a significant boost.

Novartis currently carries a Zacks Rank #3 (Hold). Investors looking for better-ranked stocks may consider companies like Allergan AGN with a Zacks Rank #1 (Strong Buy).


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