IHS Global Insight Perspective | |
Significance | UCB is to market two cardiovascular drugs and two diabetes treatments in Germany under licence from Novartis. At the same time, UCB's allergy drug Xyzal has seen its paediatric indication extended in the United States, while the same has occurred for Novartis's asthma drug Xolair in the European Union (EU). |
Implications | The cardiovascular drugs outlicensed to UCB contain an active ingredient that is reference priced in Germany, which will limit UCB's pricing strategy. Meanwhile, the two diabetes drugs are DPP-IV inhibitors, which are used with caution in the EU owing to their link to liver damage. |
Outlook | UCB's German sales will benefit from the licensing deal, but marketing the diabetes drugs in particular will be a challenge. The wider paediatric population now eligible to receive Xyzal in the United States and Xolair in the EU will help boost top-line growth at both firms. |
UCB to Market Key Novartis Drugs in Germany
Belgian drug company UCB has signed an inlicensing agreement with Swiss pharma giant Novartis, which will see it gain access to marketing rights for several of the latter's cardiovascular and diabetes treatments in Germany. The agreement will see UCB market hypertension drug Provas (valsartan) until after 2011, and will also see the Belgian firm license marketing rights to two other drugs: Dafiro (valsartan + amlodipine) and Dafiro HCT (valsartan, amlodipine, and HCT). Two of Novartis's orally administered diabetes treatments are also included in the licensing deal, namely Jalra (vildagliptin) and Icandra (vildagliptin + metformin). Financial details of the alliance have not been disclosed.
Provas was originally marketed by Novartis under the Diovan brand, which remains Novartis's top-selling drug despite several generic versions of its active ingredient being sold around the word. Combined global sales of Diovan and Co-Diovan (valsartan + hydrochlorothiazide) grew by 2% year-on-year (y/y), and reached US$1.5 billion in the first half of 2009. Jalra and Icandra, meanwhile, are better known as Novartis's DPP-IV inhibitors Galvus and Eucreas. While Galvus has been sold in Europe since 2008, sales of the drug and its combination version Eucreas have thus far been slow, owing to regulatory concerns on liver safety for all DPP-IV inhibitors. Novartis withdrew its U.S. approval application for the drug on the basis of similar concerns voiced by the FDA.
Both Companies See Extension of Paediatric Drug Approval
UCB's marketing rights to the Novartis products will extend only to Germany, which the Belgian firm describes as its second-largest national market by sales. The group's existing German drug portfolio includes other cardiovascular treatments, as well as medicines for respiratory and vascular ailments.
In other UCB news, the company looks set to see a rise in U.S. sales of allergy drug Xyzal (levocetirizine) after the FDA approved a widening of its paediatric use. Xyzal was first approved by the FDA in May 2007 for adults and children aged six and up, but its latest regulatory green light in the United States includes children aged six months and older for the relief of perennial allergic rhinitis and children from age two onwards for treating seasonal allergic rhinitis. The FDA approved a liquid formulation of Xyzal in 2008, and it is this version that is expected to be given to the youngest patients.
UCB licenses the U.S. marketing of Xyzal to French company Sanofi-Aventis, which brought in some US$92 million in turnover during the first half of 2009, compared with 19 million euro in the same period of 2008. By comparison, UCB's sales of the allergy drug fell 21% y/y to 82 million euro in the first half of 2009, which the company attributes to a mild allergy season in most European markets.
Novartis, meanwhile, has received some paediatric approval news of its own. The European Commission has agreed that use of asthma drug Xolair (omalizumab) should be extended to patients aged 6-11, as an add-on therapy for severe persistent allergic asthma. Xolair is already approved in this indication for patients aged 12 and over. The extended patient population will allow Novartis to potentially offer Xolair to as many as 35,000 new patients across the EU's 27 member states. The Commission's approval was based on findings from a study published last year, which found that children treated with Xolair suffered 31% fewer asthma attacks than those receiving placebo treatment (see Switzerland: 8 October 2009: Novartis Reveals New Data on Xolair's Benefits in Paediatric Allergic Asthma Patients).
Outlook and Implications
Sartans such as Provas's active ingredient valsartan are included within Germany's reference-pricing system, which means that UCB will not be able to command very high prices for the two cardiovascular drugs it has inlicensed from Novartis. That said, demand for the drug remains high, and will help build on UCB's existing portfolio of internal medicines on the German market. The decision to market two diabetes products is more surprising, however, as none of UCB's own top-selling medicines are diabetes drugs, and the firm is therefore inexperienced in selling this type of drug. The decision is all the more intriguing, given that the drugs in question are DPP-IV inhibitors, which come with strings attached in Europe in terms of prescribing guidelines.
Adding more patients to the paediatric remit of Xyzal in the United States and Xolair in Europe should mean a wider target market and more sales, which will boost both companies' top-line growth. This is particularly important for UCB, as its older allergy drug Zyrtec (cetirizine) is rapidly losing market share to generic competition, and the same fate is drawing increasingly near for Xyzal itself (see United States: 1 August 2008: Barr's Patent Challenge for Xyzal Triggers Litigation).
For Xolair, which Novartis co-markets with fellow Swiss drug giant Roche, the extended paediatric approval in Europe has come at a fortuitous time, as a regulatory investigation into the drug's reported links to cardiovascular side effects is about to begin in the United States, the results of which could have the potential to affect future indication extensions or even prescribing practice (see Switzerland: 20 July 2009: FDA to Examine Cardiovascular Risks Link to Xolair).