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Investor Insights - Issue 3

October 04, 2012

Investor Perspective: Novartis and COPD

The Opportunity in COPD

An important and growing segment of Novartis Pharmaceuticals portfolio is its treatment options for Chronic Obstructive Pulmonary Disease (COPD), which is a progressive, life-threatening lung disease affecting 210 million people worldwide and includes chronic bronchitis and emphysema[1]. Smoking is the primary cause of COPD, although pollutants and occupational exposure to dust can be key factors[2]. It is currently the fourth leading cause of death globally, accounting for nearly 6% of all deaths[3] and is projected to be the 3rd leading cause by 2020[2]. According to the World Health Organization (WHO), total deaths from COPD are projected to increase by more than 30% over the next 10 years[4].

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Of growing importance is the fact that COPD affects people of working age: 50% of those with COPD are now < 65 years old with 20-40% of them likely to retire prematurely due to their disease. Average lifetime earnings losses for COPD patients retiring early have been estimated to be USD 316,000 per individual[5].
As more COPD studies are conducted there is more information about patients’ similarities, differences and therapeutic needs emerging. Because of these trends, there is a need for new treatments that are even more effective than existing treatments. To help address this unmet need, Novartis is committed to providing a range of innovative treatment solutions so that physicians have the appropriate treatment for the right patient at all stages of the disease.

While global COPD drug sales grew at a CAGR of +10% from 2006 through September 2011, the market includes only a few established players[6]. The current leading COPD products on the market include Boehringer Ingelheim/Pfizer’s Spiriva® and GlaxoSmithKline’s Advair®. Collectively, products marketed by these companies account for 70% of COPD product sales[6]. With a range of products currently available and under regulatory review or in late-stage development, Novartis has an opportunity to establish a leading position in this critical and growing medical area.

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Guidelines for COPD Treatment

In 2011, the Global Initiative for Chronic Obstructive Lung Disease (GOLD) updated their Strategy for the Diagnosis, Management and Prevention of COPD, to include the latest evidence and best clinical practice[2]. Based on the GOLD recommendations, patients should be classified into one of four types based on their risk level and the severity of their symptoms:

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According to GOLD, bronchodilator medications are the cornerstone of COPD management and may be long or short acting, depending on the disease severity[2]. Inhaled long-acting bronchodilators are used regularly by patients to open the airways and keep them open for 12 to 24 hours. There are two main types of long-acting bronchodilators:

  • Long-acting beta2-agonists (LABAs) – act on the beta2-adrenergic receptor, causing smooth muscle relaxation and dilation of the bronchial passages.
  • Long-acting muscarinic antagonists (LAMAs) – inhibit muscarinic receptors in the bronchial airways, which leads to muscle relaxation and improved lung function.

Due to the progressive nature of COPD, treatment is often based on giving multiple medications to manage symptoms and control the disease. These can be delivered as multiple individual medications or as combinations of medications in one inhaler.

The use of ICS in COPD remains a matter for debate. In contrast to asthma, the efficacy of ICS is less well-established in COPD (The right treatment for the right patient: the Novartis view on COPD, Nature, 2012).
While not the combination treatment recommended most frequently by the guidelines for all patients, the most commonly used real-world combination treatment is the LABA/inhaled corticosteroids (ICS) combination, which is a well-established maintenance therapy and used in 47% of patients[7]. It is the LABA/LAMA combinations that are in development, however, that are generating significant interest in the medical community, as they allow for reduced use of ICS. Following publication of the updated GOLD guidelines, and based on physician commentary at this year’s ERS Congress, it is becoming increasingly clear that the medical community believes ICS should be limited to the most severely ill patients, primarily those with a high frequency of exacerbation, as suggested in the second choice treatment column of the guidelines[2].

Novartis COPD Portfolio and Pipeline delivered through the Breezhaler device

Consistent with GOLD treatment guidelines[2], Novartis aims to provide a full range of treatment solutions to help patients improve symptom control and reduce exacerbations (an acute worsening of the patient’s respiratory symptoms). A key characteristic that differentiates Novartis pipeline is that it contains a range of products to serve the needs of patients exhibiting varying degrees of COPD symptoms. Novartis also provides patients the benefit of using a single device across its entire COPD portfolio, so that when more therapies are added, patients do not need to learn to use a new device.

Each of the below Novartis products is available or being developed for delivery via the Breezhaler® device, a single-dose dry powder inhaler with low air flow resistance, which allows patients to hear, feel and see that they have taken the drug correctly[8].


LABA

Onbrez® Breezhaler® (indacaterol maleate/QAB149)[8]

  • Currently the only approved once-daily LABA COPD treatment to offer clinically relevant 24-hour bronchodilation combined with a rapid onset of action within five minutes at first dose.
  • Has better data than Spiriva® on symptoms improvement (shortness of breath and health-related quality of life).
  • Available to patients in over 85 countries around the world.
    • First approved and launched in the EU and since received approvals in all major markets worldwide including U.S., Japan and China.
    • Onbrez® Breezhaler® is marketed in the U.S. under the name Arcapta® Neohaler®.
    • Achieved global sales of USD 62 million in the first half of 2012, growing at 47% year over previous year in constant currency terms[9].

LAMA

Seebri® Breezhaler® (glycopyrronium bromide/NVA237)[10]

  • The European Commission has approved Seebri® Breezhaler® 44 mcg delivered dose (equivalent to 50 mcg glycopyrronium measured dose per capsule), as a once-daily inhaled maintenance bronchodilator treatment to relieve symptoms in adult patients with COPD on 1st October, 2012. This follows the September 28 approval of once-daily Seebri® Inhalation Capsules 50 mcg in Japan.
  • Currently under regulatory review in Canada, Latin America and key countries in the AMAC region.
  • LAMA developed as a once-daily inhaled maintenance therapy for the treatment of COPD. Phase III data from the GLOW 1, 2, 3 and 4 studies demonstrate that glycopyrronium increased patients' lung function over a 24-hour period compared to placebo with a fast onset of action at first dose, and improved exercise endurance versus placebo[11,12,13,14]
  • Phase III data recently presented at the ERS Congress demonstrated increased lung function and exercise tolerance in patients taking glycopyrronium bromide[11,12,13].
  • Glycopyrronium bromide was exclusively licensed to Novartis in April 2005 by Vectura and its co-development partner Sosei.
  • U.S. filing is on track and expected for early 2014.

Fixed-dose Combination Treatments

QVA149 (LABA/LAMA)

  • Novartis believes in the potential of QVA149 as a once-daily treatment.
    Phase III investigational inhaled, once-daily, fixed dose combination of Novartis indacaterol maleate and glycopyrronium bromide. It was spotlighted at the recently-held European Respiratory Society (ERS) Congress in Vienna. If approved it would be one of the first products in the new class of medications called LABA/LAMA Fixed-Dose Combinations (FDCs).
  • Recently completed the final Phase III study needed for filing of QVA149 in the EU and Japan – filings are expected in Q4 2012.
  • U.S. filing is on track and expected at the end of 2014.

QMF149 (LABA/ICS)

  • Phase II investigational inhaled, once-daily, fixed dose combination of Novartis` indacaterol maleate and Merck’s mometasone for the treatment of asthma and COPD.
  • Filing in ex-U.S. regions for both asthma and COPD is planned for 2015.

Spotlight on Seebri® Breezhaler®

Seebri® Breezhaler® is a long-acting muscarinic antagonist (LAMA), a type of bronchodilator that is recommended in COPD global treatment strategies as maintenance therapy.

The regulatory submissions for Seebri® Breezhaler® are based on data from the Novartis Phase III GLOW trials which demonstrated the safety and efficacy of glycopyrronium 50 mcg capsule dose and involved 1,996 COPD patients who required maintenance treatment from around the world, with many in EU countries[11,12,13]. The GLOW trials showed that glycopyrronium improved lung function in the first four hours after morning dosing and sustained 24-hour bronchodilation[12]. Patients on glycopyrronium demonstrated improved lung function, reduced shortness of breath, reduced exacerbations, reduced use of rescue medication, improved quality of life and improved exercise tolerance compared to placebo[11,12,13].

About the GLOW trials:


GLOW1 was a 26-week, randomized, double-blind, placebo-controlled study. The study demonstrated the clinically significant superiority of glycopyrronium versus placebo for lung function improvements at 12 weeks (primary endpoint) measured by trough FEV1 (p<0.01)[11].


GLOW2 was a 52-week, randomized, double-blind, placebo-controlled study with open-label (OL) tiotropium as an active exploratory arm. In this study, glycopyrronium was significantly superior to placebo (p<0.001) with regard to the improvement of trough FEV1 at week 12 (primary endpoint) and was similar to OL tiotropium over 52 weeks measured by improvements in trough FEV1 compared to placebo. In addition to demonstrating benefits in terms of lung function, glycopyrronium exhibited a rapid onset of action within five minutes at first dose and reduced exacerbations. Significant benefits in both breathlessness and health-related quality of life (HRQL), as measured by the Transition Dyspnea Index (TDI) and St. George's Respiratory Questionnaire (SGRQ) compared to placebo, were also demonstrated[12].


The GLOW3 study showed that after glycopyrronium was administered in the morning, patients experienced improved exercise endurance from the first dose onward. Overall, patients treated with glycopyrronium experienced a significant 21% improvement in exercise endurance versus placebo at the end of the study (day 21), with a significant 10% increase from day one (both p<0.001)[13].

In all studies, glycopyrronium was shown to have an overall safety profile similar to placebo[11,12,13].

Spotlight on QVA149

IGNITE Phase III Clinical Trials for QVA 149

  • The potential benefit of Dual Brochodilation also to reduce exacerbation (The right treatment for the right patient: the Novartis view on COPD, Nature, 2012).
    The QVA149 IGNITE clinical trial program is made up of 10 studies in total with more than 7,000 patients across 42 countries[8,15-26]. The studies in this program are evaluating the efficacy and safety of QVA149 versus indacaterol, glycopyrronium, tiotropium, salmeterol/fluticasone and placebo. Their objective is to clarify further whether dual bronchodilation translates into improvements in outcomes for patients with COPD.
  • The first five studies (ILLUMINATE, SHINE, BRIGHT, ENLIGHTEN, SPARK) have already been completed, with three additional studies (BLAZE, ARISE, BEACON) expected to be completed by the end of the year.
    • The five completed studies are needed for Novartis to seek regulatory approval; the remaining five studies aim to strengthen the compound’s clinical profile.
    • All five completed studies have met their primary endpoints of efficacy, safety, exercise endurance, and reduction of exacerbations.
    • Data recently presented at ERS from three studies of the IGNITE program (SHINE, ILLUMINATE and ENLIGHTEN) demonstrated that QVA149 significantly improved lung function compared to competing COPD therapies, including Spiriva® and Advair®[15,16,17].
    • SPARK, which is the final study of the program needed for initial filings of QVA149 in Europe and Japan, showed that combination drug QVA149 significantly reduced overall exacerbation rates compared to LAMAs alone[19].

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Novartis – An Emerging Leader in COPD Treatment

Novartis diverse COPD pipeline, and the strong late-stage data this pipeline has generated to date, has the Company well positioned to expand its COPD portfolio and capture a meaningful share of the market. Specifically, based on the data generated to date from the IGNITE phase III clinical trial program[8,15-26], QVA149 has the potential to become a best-in-class combination treatment for COPD. In particular, QVA149’s strong exacerbation data, one of the most clinically meaningful COPD endpoints, has the potential to commercially differentiate this product candidate from currently marketed drugs, as well as others in development by competitors[19].

While the largest commercial opportunities within COPD exist in combination therapies, such as QVA149, Novartis has a well-rounded portfolio that meets the needs of all four types of patients classified by GOLD[2] and will be available in the same inhaler. This versatility should help enable the Company to further penetrate the global COPD market and deliver on its promise to provide COPD patients with a range of innovative treatments that fulfill their unmet needs. As a result, Novartis is poised to capitalize on this significant growth opportunity and become an important player in COPD treatment.

Disclaimer

These materials contain forward-looking statements that can be identified by terminology such as “potential,” “expected,” “will,” “planned,” or similar expressions, or by express or implied discussions regarding potential new products, potential new indications for existing products, or regarding potential future revenues from any such products; potential outcomes of our efforts to improve the quality standards at any or all of our manufacturing sites, or regarding potential future sales or earnings of the Novartis Group or any of its divisions; or by discussions of strategy, plans, expectations or intentions. You should not place undue reliance on these statements. Such forward-looking statements reflect the current views of the Group regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. There can be no guarantee that any new products will be approved for sale in any market, or that any new indications will be approved for any existing products in any market, or that any approvals which are obtained will be obtained at any particular time, or that any such products will achieve any particular revenue levels. Nor can there be any guarantee that the Group will be successful in its efforts to improve the quality standards at any or all of our manufacturing sites, or that we will succeed in restoring or maintaining production at any particular sites. Neither can there be any guarantee that the Group, or any of its divisions, will achieve any particular financial results. In particular, management's expectations could be affected by, among other things, unexpected regulatory actions or delays or government regulation generally; unexpected clinical trial results, including additional analyses of existing clinical data or unexpected new clinical data; the Group's ability to obtain or maintain patent or other proprietary intellectual property protection, including the ultimate extent of the impact on the Group of the loss of patent protection on key products which commenced last year and will continue this year; unexpected product manufacturing and quality issues, including the potential outcomes of the Warning Letter issued to us with respect to three Sandoz manufacturing facilities, and the potential outcome of efforts to restart production at the Consumer Health manufacturing facility at Lincoln, Nebraska; government, industry, and general public pricing pressures; uncertainties regarding actual or potential legal proceedings, including, among others, actual or potential product liability litigation, litigation and investigations regarding sales and marketing practices, shareholder litigation, government investigations and intellectual property disputes; competition in general; uncertainties regarding the effects of the ongoing global financial and economic crisis, including the financial troubles in certain Eurozone countries; uncertainties regarding future global exchange rates; uncertainties regarding future demand for our products; uncertainties involved in the development of new healthcare products; the impact that the foregoing factors could have on the values attributed to the Group's assets and liabilities as recorded in the Group's consolidated balance sheet; and other risks and factors referred to in Novartis AG's current Form 20-F on file with the US Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. Novartis is providing the information in this presentation as of this date and does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise. Novartis is providing the information in this presentation as of this date and does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise.

[1] Global Alliance Against Chronic Respiratory Diseases (GARD). Global surveillance, prevention and control of chronic respiratory diseases: a comprehensive approach. Available at: http://www.who.int/gard/publications/GARD%20Book%202007.pdf Last accessed 29 June 2012.
[2] Global Initiative for Chronic Obstructive Lung Disease (GOLD). Global Strategy for the Diagnosis, Management, and Prevention of Chronic Obstructive Pulmonary Disease. Updated 2011. http://www.goldcopd.org/guidelines-global-strategy-for-diagnosis-management.html.
[3] World Health Organization. Chronic Obstructive Pulmonary Disease Factsheet No. 310, Available at: http://www.who.int/mediacentre/factsheets/fs310/en/index.html. Last accessed 19 September 2012.
[4] World Health Organization. Chronic Obstructive Pulmonary Disease Factsheet No. 315, Available at: http://www.who.int/mediacentre/factsheets/fs315/en/. Last accessed 19 September 2012
[5] Fletcher MJ et al. COPD Uncovered: An International survey on the impact of chronic obstructive pulmonary disease (COPD) on a working age population. BMC Public Health 2011; 11: 612.
[6] Source: IMS, DSP 2011, Mattson Jack, NICE guideline, Developed by The National Collaborating Centre for Chronic Conditions. Thorax 2004; 59 (Suppl 1): i1-i232
[7] Source: Adelphi Disease Spec Program X 2011: PRF Section B Q7.
[8] Onbrez® Breezhaler® (indacaterol) EU Summary of Product Characteristics. Available at: http://www.ema.europa.eu/ema/index.jsp?curl=pages/medicines/human/medicines/001114/human_med_001219.jsp&mid=WC0b01ac058001d124. Last Accessed 19 September 2012.
[9] Novartis Q2 and First Half 2012 Interim Financial Report - Supplementary Data
[10] Seebri® Breezhaler® Draft EU SmPC, June 2012. Novartis Europharm Limited, Horsham, United Kingdom
[11] D'Urzo A, et al. Efficacy and safety of once-daily NVA237 in patients with moderate-to-severe COPD: the GLOW1 trial. Respiratory Research 2011, 12:156.
[12] Kerwin E, et al. Efficacy and safety of NVA237 versus placebo and tiotropium in patients with moderate-to-severe COPD over 52 weeks: The GLOW2 study. Eur Resp J. 2012. Published on July 26, 2012 (doi:10.1183/09031936.00040712). Last accessed 19 September 2012.
[13] Beeh K, Drollmann A, Di Scala L, Smith R. Once-daily NVA237 improves exercise endurance from first dose in patients with COPD: the GLOW3 trial. Int J Chron Obstruct Pulmon Dis. 2012; 7:503-513.
[14] Sekiya M et al. Safety and efficacy of NVA237 once daily in Japanese patients: the GLOW4 trial. [ERS abstract 853970; Session 245; Hall A-7; Date: Mon 3 Sep Time: 12:50-14:40.]
[15] ClinicalTrials.gov. A Study to Assess the Efficacy, Safety and Tolerability of Once-daily QVA149 in Patients With Moderate to Severe Chronic Obstructive Pulmonary Disease (COPD) (SHINE). NCT01202188. http://www.clinicaltrials.gov/ct2/show/NCT01202188?term=NCT01202188&rank=1. Last accessed 19 September 2012.
[16] ClinicalTrials.gov. QVA149 versus Fluticasone/Salmeterol in Patients With Chronic Obstructive Pulmonary Disease (COPD) (ILLUMINATE). NCT01315249 http://www.clinicaltrials.gov/ct2/show/NCT01315249?term=NCT01315249&rank=1. Last accessed 19 September 2012.
[17] ClinicalTrials.gov. A Study to Assess the Long-term Safety of QVA149 (ENLIGHTEN). NCT01120717 http://www.clinicaltrials.gov/ct2/show/NCT01120717?term=QVA149+ENLIGHTEN&rank=1.Last accessed 19 September 2012
[18] ClinicalTrials.gov. Effect of QVA149 on Exercise Tolerance in Patients With Chronic Obstructive Pulmonary Disease (COPD) (BRIGHT). NCT01294787. http://www.clinicaltrials.gov/ct2/show/NCT01294787?term=NCT01294787.&rank=1. Last accessed 19 September 2012.
[19] ClinicalTrials.gov. Effect of QVA149 Versus NVA237 and Tiotropium on Chronic Obstructive Pulmonary Disorder (COPD) Exacerbations (SPARK). NCT01120691. http://www.clinicaltrials.gov/ct2/show/NCT01120691?term=NCT01120691.&rank=1. Last accessed 19 September 2012.
[20] ClinicalTrials.gov. Long Term Safety and Tolerability of QVA149 Versus Tiotropium in Japanese Patients With Chronic Obstructive Pulmonary Disease (COPD) (ARISE). NCT01285492. http://www.clinicaltrials.gov/ct2/show/NCT01285492?term=NCT01285492.&rank=1. Last accessed 19 September 2012.
[21] ClinicalTrials.gov. The Effect of QVA149 on Dyspnea in Patients With Chronic Obstructive Pulmonary Disease (COPD) (BLAZE). NCT01490125. http://www.clinicaltrials.gov/ct2/show/NCT01490125?term=NCT01490125.&rank=1. Last accessed 19 September 2012
[22] ClinicalTrials.gov. Comparison of Safety and Efficacy of the Combination Product QVA149A Against the Concurrent Administration of the Individual Components, QAB149 and NVA237, in Patients With Chronic Obstructive Pulmonary Disease (COPD) (BEACON). http://www.clinicaltrials.gov/ct2/show/NCT01529632?term=BEACON&rank=6. Last accessed 19 September 2012.
[23] ClinicalTrials.gov. Comparison of Long-term Safety of the Combination Product QVA149A Against Placebo and Standard of Care Treatment in Chronic Obstructive Pulmonary Disease Patients With Moderate to Severe Airflow Limitation (GLISTEN). http://www.clinicaltrials.gov/ct2/show/NCT01610037?term=GLISTEN&rank=1. Last accessed 19 September 2012.
[24] ClinicalTrials.gov. The Effect of QVA149 on Health Related Quality of Life in Patients With Chronic Obstructive Pulmonary Disease (COPD) (QUANTIFY). http://clinicaltrials.gov/ct2/show/NCT01574651?term=QUANTIFY&rank=1. Last accessed 19 September 2012.
[25] FDA Access Data. Spiriva Medical Review Part 2, pages 37-38.http://www.accessdata.fda.gov/drugsatfda_docs/nda/2004/21-395_Spiriva.cfm. Last accessed 19 September 2012.
[26] FDA Access Data. Advair Medical Review Nov. 17, 2003, Page 133. http://www.accessdata.fda.gov/drugsatfda_docs/nda/2003/021077_S003_ADVAIR_DISKUS.pdf Last accessed 19 September 2012.

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Q3 Results 2013

On Thursday, April 24, Novartis will announce its results for the first quarter of 2014