Novartis (NVS) CAR-T Therapy Kymriah Receives FDA Approval

Novartis AG (NYSE:NVS) announced that the FDA has approved its breakthrough gene transfer treatment, Kymriah (tisagenlecleucel) suspension for the treatment of patients up to 25 years of age with B-cell precursor acute lymphoblastic leukemia (ALL) that is refractory or in second or later relapse.

Kymriah, formerly CTL019, is the first chimeric antigen receptor T cell (CAR-T) therapy approved. A novel immunocellular therapy and one-time treatment, Kymriah uses patient's T cells to fight cancer.

CAR T is manufactured for individual patients using their own cells thereby making it different from typical small molecule or biologic therapies. During the treatment, T cells are drawn from a patient's blood. These cells are then reprogrammed in the manufacturing facility to create genetically coded cells to express a chimeric antigen receptor to recognize and fight cancer cells and other B cells expressing a specific antigen.

The drug was developed in collaboration with the University of Pennsylvania.

In addition, the FDA has approved a Risk Evaluation and Mitigation Strategy (REMS) for Kymriah to inform and educate healthcare professionals about the risks that may be associated with Kymriah treatment.

Meanwhile, Novartis plans to make additional filings for Kymriah in the United Staes and EU later this year for Kymriah for the treatment of adult patients with r/r diffuse large B-cell lymphoma (DLBCL). In April, the FDA granted Breakthrough Therapy designation to Kymriah based on data from the JULIET study.

Novartis also teamed up with the United States Centers for Medicare and Medicaid Services (CMS) to improve efficiencies in current regulatory requirements to deliver value-based care and ensure access for this specific patient population.

Kymriah will be manufactured for each individual patient using their own cells at the Novartis Morris Plains, New Jersey facility.

Our Take

The approval is a major boost for Novartis given the potential in the CAR T therapy space. The approval opens up new frontiers in the treatment of cancer by advancing immunocellular therapy for children and young adults with r/r B-cell ALL which comprises approximately 25% of cancer diagnoses among children under 15 years old and is the most common childhood cancer in the United States.

An approval was in the cards as the FDA Oncologic Drugs Advisory Committee (ODAC) had unanimously recommended the approval of immunocellular therapy in Jul 2017.

The approval will also boost Novartis’ already strong oncology portfolio which boasts of Afinitor, Exjade, Jakavi, Zykadia, Tasigna, and Jadenu. Novartis is also working on the label expansion of Kymriah.

Novartis stock has rallied 14.9% in the year so far compared with the industry’s 11.1% gain.

Going forward, we expect that the approval of new drugs and label expansion of existing ones will bode well for Novartis even though stiff generic competition for key drugs like Gleevec continues to act as a major deterrent.

Earlier in the week, biotech giant Gilead Sciences, Inc. (NASDAQ:GILD) announced that it will buy Kite Pharma, Inc. (NASDAQ:KITE) to foray into the emerging field of cell therapy. Kite’s axicabtagene ciloleucel (axi-cel) is being developed for the treatment of refractory aggressive non-Hodgkin lymphoma, which includes DLBCL, transformed follicular lymphoma (TFL) and primary mediastinal B-cell lymphoma (PMBCL). The Biologics License Application (BLA) for the candidate was submitted in March 2017. This CAR T therapy is currently under priority review in the United States and the FDA is expected to give a decision on Nov 29, 2017.

Zacks Rank & Key Pick

Novartis currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the healthcare sector is Aduro Biotech, Inc. (NASDAQ:ADRO) which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Aduro Biotech’s loss per share estimates narrowed from $1.46 to $1.32 for 2017 and from $1.41 to $1.24 over the last 30 days. The company delivered positive surprises in two of the trailing four quarters with an average beat of 2.53%.

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