Novartis trims again with $390m drugs sale to Recordati

Novartis has been streamlining its business since CEO Vas Narasimhan took over, and has continued that push with the divestment of three drugs to Recordati for $390 million upfront.

The Italian drugmaker is taking control of Signifor and its long-acting follow-up Signifor LAR – both passed on the somatostatin analogue pasireotide – as well as an experimental drug called osilodrostat (LCI699) in late-stage development.

Both drugs are used to treat pituitary problems that persist after initial surgery. Twice-daily injection Signifor is used to treat Cushing’s disease, which occurs when a pituitary tumour causes overproduction of cortisol, leading to weight gain and other symptoms and can shorten life expectancy.

Meanwhile, Signifor LAR is a monthly depot formulation used to treat acromegaly, overgrowth of bone caused by a pituitary tumour that results in excess growth hormone.

When Signifor LAR was approved in 2014, Novartis was suggesting it could become a replacement for its blockbuster Sandostatin LAR (octreotide acetate) depot product, which was making annual sales of almost $1.6 billion at the time but had recently lost patent protection.

As it turns out, Signifor LAR never approached those heights – franchise sales were just $72 million last year according to Recordati – while Sandostatin has proved remarkably resilient to competition and is still a $1 billion-plus product for Novartis.

Recordati gets a franchise that will add to its top-line immediately, but the big interest in the deal arguably lies with osilodrostat, which is also tied to undisclosed milestone payments. The drug is an inhibitor of 11 beta-hydroxylase, an enzyme involved in cortisol production, and if approved could provide an oral alternative to injections for hormonal control of Cushing’s disease.

Phase 3 results reported earlier this year showed that Cushing’s patients treated with the drug were much more likely to meet a threshold for reduced cortisol in the urine, a biomarker efficacy in the disease, compared to placebo.

One unanswered question at the moment is whether osilodrostat maintains its efficacy over time, and so could help patients avoid going on to need an aggressive form of surgery – bilateral adrenalectomy – that can introduce other hormonal problems.

There is also a lot of interest in seeing whether the drug will be effective in the not-insignificant proportion of patients who don’t respond to Signifor.

Initial suggestions are that it is much more likely to achieve a response than the older drug, with the phase 3 study showing that 86% of patients saw urinary cortisol fall to normal levels, compared to 26% of the placebo group. Prior studies suggest a normalisation rate of around 68% with Signifor.

Andrea Recordati, the Italian firm’s CEO, said: “these important additions to our product portfolio…represent a key and historical milestone for Recordati, reaffirming the continuation of the successful execution of its strategy to become a true global player in the treatment of rare diseases.”

The sale of the three drugs comes as Novartis is in the midst of a streamlining effort, second only to AstraZeneca in the number of divestments and out-licensing deals last year, according to analysts.

The Swiss pharma group shed 20% of its R&D programmes last year to focus on those with the best commercial prospects, selling its anti-infectives research to Boston Pharma for example. It also divested its consumer health joint venture stake with GlaxoSmithKline, spun out eyecare unit Alcon and sold off its US oral solid drugs business to Aurobindo.