A Big Step in the Right Direction
Jordo is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Novartis (NYSE: NVS) is surging ahead with its plans to develop new antibodies and its efforts to fight cancer.The company recently entered an agreement with Genmab (GEN), allowing Novartis to utilize Genmab's DuoBody technology platform to work on the development of new antibodies. Genmab will receive $2 million in payments upfront. However, this is just the initial down payment in order to secure Genmab's cooperation. If all the milestones of the project are achieved, the company would receive an estimated $175 million. It will also be eligible to receive research funding and royalties.
This agreement is not only good for Genmab though. Genmab will create panels for "bispecific antibodies to two disease target combinations identified by Novartis." By identifying these antibodies, Novartis will be able to take a more focused stance in its research. Genmab's innovative platform may allow Novartis to improve antibody therapy for things such as "cancer, autoimmune, infectious and central nervous system disease." This could have a very positive effect on Novartis stock, especially if all the project goals are reached.
Novartis may be a rising star in the field of oncology. The company expects to gain a good reputation as a result of "key cancer data on both its marketed [cancer] products as well as promising drugs in its early pipeline." To stay ahead in the field of oncology, pharmaceutical companies have to make a difference. In the future, the most well-known companies will be the ones that found cures and prevention methods for various types of cancer.
Novartis will soon release information regarding late-stage data on its drug Afinitor. It plans to use this drug to treat post-menopausal women with advanced breast cancer. The company should also soon release information on two late-stage studies of its blood-cancer drug Tasigna in patients with Philadelphia chromosome-positive chronic myeloid leukemia, a complex form of cancer. Novartis' fight against cancer does not stop there. It is also working on ways to treat non-small cell lung cancer, metastatic breast cancer, NRAS-melanoma, and other solid tumors. Should the company's endeavors prove to be successful, it will become one of the leaders in the industry very quickly.
Competitor Bristol-Myers Squibb (NYSE: BMY), recently suffered a setback, as its breast-cancer drug was found to be even less effective than older drugs on the market. This is unfortunate news for the stock, as cancer cures are important to creating our future leaders in the pharmaceutical industry. The older drugs are not only more effective, but they are also cheaper, which will really put the Bristol Myers Squibb drug out of the running. This is certainly a blow to the company, and Bristol Myers Squibb stock will likely be decreasing as a result.
News has been mixed about competitor Johnson & Johnson's (NYSE: JNJ) new prostate cancer treatment. Studies of Zytiga supposedly show that the drug increases lifespan and prevents the cancer from spreading. The company is trying to have it approved for men in early stages of cancer. The clinical trial was stopped early for ethical reasons, however, so it is now incredibly difficult for the company to prove statistical significance in terms of the drug's ability to lengthen lifespan. Johnson & Johnson may have bungled its first attempt to get involved in the cancer treatment arena. As a result, the early end to these trials will probably hurt Johnson & Johnson stock.
With the Genmab agreement and the company's focus on fighting cancer, Novartis is certainly a good stock at the moment, and I expect it to be rising as a result of these events. For those interested in pharmaceutical stocks, I believe that Novartis is a solid investment at this time.
jordobivona has no positions in the stocks mentioned above. The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services recommend Johnson & Johnson and Novartis. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
