Novartis AG (ADR) (NYSE:NVS) is scheduled for a vital FDA panel meeting regarding its pipeline cancer treatment. The panel review is expected to take place later this month and Kite Pharma Inc (NASDAQ:KITE) might benefit heavily.
According to Canaccord analyst John Newman, any talks regarding the manufacture of the Novartis drug called CTL019 should play a part in differentiating Kite. Despite the announcement about the scheduled FDA panel meeting, the stocks of the two companies adopted a bearish trend. However, this is because analysts had negative sentiments about drug manufacturers that have been developing CAR-T therapies. Kite’s stock was down by 2.8 percent while Novartis stock tanked by 1.4 percent.
Will the expectations from the cancer treatments reverse the trend?
Despite the bearish trend, Newman maintained a bullish view on the stock. This is because the two firms had their CAR-T therapies approved in two blood cancer reviews. The FDA is expected to carry out the review of Novartis’ cancer treatment on July 12. The review process will dwell on key questions regarding the Novartis treatment.
CAR-T treatments involve retrieving immune cells from the subject’s blood, after which they are programmed to seek out and terminate cancer cells. Unfortunately, some of these treatments have toxic effects on the nervous system. Newman also stated that the lag in turnaround is also one of the challenges. Kite is the industry leader when it comes to turnaround time with 16-18 days while Novartis has a turnaround time of 22-29 days.
“Any discussion on manufacturing for Novartis CTL019 may highlight difficulties and benefit Kite, which has no had issues with failures and long turnaround times,” stated Newman.
The analyst also pointed out that the FDA might also choose to talk directly to Novartis about manufacturing. This would however lead to a delay in the approval process. The FDA will probably enquire about safety. The regulatory body is also expected to seek the opinions of physicians about the severe toxicity that is sometimes characterized by CAR-T. Novartis is optimistic that the review process will go well.
Novartis stock closed the latest trading session on Thursday at $81.97.
