Novartis Stock Downtrend Channel Breakout On NATALEE trial Readout

  • Post category:Biotechnology
  • Reading time:4 mins read
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Novartis stock exploded higher out of its downtrend channel on March 27, 2023. The downtrend channel breakout was the result of a positive NATALEE trial readout.

Novartis stock chart on March 27 2023 with a downtrend channel breakout
Novartis stock chart on March 27, 2023 with a downtrend channel breakout

Why Novartis Stock Exploded Higher

On March 27, 2023, Novartis announced positive topline results from an interim analysis of NATALEE, a Phase III trial evaluating Kisqali® (ribociclib) plus endocrine therapy (ET) in a broad population of patients with hormone receptor-positive/human epidermal growth factor receptor 2-negative (HR+/HER2-) early breast cancer (EBC) at risk of recurrence. The Independent Data Monitoring Committee recommended stopping the trial early as the primary endpoint of invasive disease-free survival (iDFS) has been met. Kisqali plus ET significantly reduced the risk of disease recurrence, compared to standard adjuvant ET alone, with consistent benefit in patients with stage II and stage III EBC regardless of nodal involvement.

“While most patients are diagnosed and treated early with the aim to cure breast cancer, the risk of cancer returning, often as metastatic disease, peaks within three years after diagnosis, but never goes away completely,” said Dennis J. Slamon, MD, Director of Clinical/Translational Research, University of California, Los Angeles Jonsson Comprehensive Cancer Center and Chairman and Executive Director of Translational Research In Oncology (TRIO) and NATALEE trial lead investigator. “There is a critical need for new, well-tolerated options that keep patients cancer-free without disrupting quality of life. The NATALEE trial, where ribociclib was given for three years plus ET, was designed with these unmet needs in mind, and it is extremely encouraging that this study met its primary endpoint.”

“The positive topline results from NATALEE represent a major milestone in our ambition to expand the benefits of Kisqali to patients with earlier stages of breast cancer, building on the heritage of this effective treatment in HR+/HER2- metastatic breast cancer,” said Shreeram Aradhye, M.D., President, Global Drug Development and Chief Medical Officer, Novartis. “These data have the potential to be paradigm-shifting for patients at risk of recurrence, including those with no nodal involvement, who have limited well-tolerated options to prevent recurrence. Our teams are working on submissions to health authorities around the world with the hope to bring Kisqali to many more patients diagnosed with breast cancer.”

Novartis’ NATALEE readout a ‘best case scenario,’ says BofA

On March 27, 2023, BofA notes that Novartis declared that the NATALEE trial of Kisqali had met its primary endpoint at the second interim analysis. Given that the trial was terminated early at interim analysis, the firm assumes that the OS HR is 1 or less, meaning it shows no harm, as this is a requirement for FDA filing. BofA sees this as the best case scenario for a significant catalyst for Novartis. Early adjuvant breast cancer is viewed by BofA as a $6B-8B sales opportunity and has a Buy rating and CHF 97 price target on Novartis shares.

Morgan Stanley expects Novartis stock to outperform

Following the announcement of the interim analysis of the NATALEE study of Kisqali on March 27, 2023, Morgan Stanley analyst Mark Purcell anticipates an increase in the value of Novartis shares. The trial was stopped early by the independent data monitoring committee as the primary endpoint of invasive disease-free survival has been met. Morgan Stanley forecasts Kisqali 2026 sales of $1.9B, which it notes is below the $2.0B consensus forecast. On Novartis stock, Morgan Stanley has an Underweight rating and an unchanged CHF 88 price target.

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