Novartis AG (ADR) (NYSE:NVS) Mereo BioPharma Group Ltd

Basel-located Novartis AG (ADR) (NYSE:NVS), one of the largest pharmaceutical companies in the world, has announced that it will spin-off three of its ‘mid-stage clinical assets’ to a UK-based biotechnology company, Mereo BioPharma Group Ltd against equity exchange.

On Tuesday, the company announced that along with Phase 4 Partners and a host of institutional investors it has helped in creating Mereo BioPharma Group Ltd. The company operates from its UK-facilities and was created with a mission to ‘acquire and rapidly develop’ innovative medicines. The company’s focus is in the areas of rare and special diseases therapies and typically operates by acquiring mid-stage development programs which are already validated.

Novartis AG (ADR) (NYSE:NVS) would continue to hold a stake in the success of the three compounds which it will spin-off to Mereo BioPharma for further development. Novartis, under the present agreement would be eligible for receiving payments as well as milestones, besides royalties from ensuing commercial sales of these drugs.

Head of Novartis Pharmaceuticals, David Epstein, has stated that, his company is very pleased to have concluded this deal with Mereo and contributed to bringing valued ‘innovations to patients.’ The drugs which Novartis will offer Mereo BioPharma involve unmet medical needs drugs such as, BPS-197, BGS-649. BPS-804 drug will address bone density development for brittle bone syndromes, while BCT-197 will address ‘acute exacerbations’ in COPD. Additionally, BGS-649 will treat obese men who suffer from such conditions as hypogonadotrophic hypogonadism. The drug will help in the normalization of testosterone levels.

Novartis AG (ADR) (NYSE:NVS) itself has been at the forefront of healthcare solutions innovations and holds a diversified product portfolio. As the challenges for large-sized pharmaceuticals escalate, Novartis too appears to have found a viable profitable solution in spinning of its development-stage products to specialized pharmaceutical companies. Swapping drug development processes for equity is indeed the roadmap for most pharmaceutical giants like Novartis.

Novartis AG, incorporated on March 1, 1996, is a holding company. The Company is a group of companies specializing in the research, development, manufacturing and marketing of a range of healthcare products led by pharmaceuticals. Its portfolio includes medicines, eye care, generic pharmaceuticals, preventive vaccines and over-the-counter (OTC) products. The Company’s segments include Pharmaceuticals, which include patent-protected prescription medicines; Alcon, which include surgical, ophthalmic pharmaceutical and vision care products; Sandoz, which include generic pharmaceuticals, and Consumer Health, which includes the OTC Division.

Pharmaceuticals Division

The Company’s Pharmaceuticals Division researches, develops, manufactures, distributes and sells patented prescription medicines in the therapeutic areas, such as oncology, cardio-metabolic, immunology and dermatology, retina, respiratory, neuroscience and established medicines. The Pharmaceuticals Division is organized into global business franchises responsible for the commercialization of various products. Its Pharmaceuticals Division also has a unit focused on the development and commercialization of Cell and Gene Therapies. The Pharmaceuticals Division sells products in approximately 155 countries across the world.

The Company’s Oncology products include Afinitor/Votubia, Exjade, Jakavi, Sandostatin SC and Sandostatin LAR, Signifor and Signifor LAR, Femara, Zometa, Tasigna and Gleevec/Glivec, among others. Gleevec/Glivec is a kinase inhibitor approved to treat patients with metastatic and/or unresectable KIT (CD117) positive (KIT+) gastrointestinal stromal tumors (GIST), as an adjuvant treatment for certain adult patients resection of KIT+ GIST, and as a targeted therapy for Philadelphia chromosome-positive (Ph+) chronic myeloid leukemia (CML). Sandostatin SC and Sandostatin LAR (octreotide acetate/octreotide acetate for injectable suspension) is a somatostatin analogue indicated for the treatment of patients with acromegaly, a chronic disease caused by over-secretion of pituitary growth hormone in adults. Sandostatin is also indicated for the treatment of patients with certain symptoms associated with carcinoid tumors and other types of gastrointestinal and pancreatic neuroendocrine tumors.

The Company’s Afinitor and Afinitor Disperz/Votubia (everolimus) is an oral inhibitor of the mTOR pathway. Tasigna (nilotinib) is a signal transduction inhibitor of the BCR-ABL tyrosine kinase. Exjade (deferasirox) is an oral iron chelator approved for the treatment of chronic iron overload due to blood transfusions in patients two years of age and older. Zometa (zoledronic acid for injection/zoledronic acid 4 mg) is a treatment to reduce or delay skeletal-related events, including pathologic fracture, spinal cord compression, and/or requirement of radiation therapy or surgery to bone, in patients with bone metastases (cancer that has spread to the bones) from solid tumors and multiple myeloma.

The Company’s Cardio-Metabolic product includes Galvus. Galvus (vildagliptin), an oral DPP-4 inhibitor, and Eucreas, a single-pill combination of vildagliptin and metformin, are indicated for the treatment of type 2 diabetes. Galvus is approved in more than 120 countries, including European Union (EU) member states, Japan and countries in Latin America and Asia-Pacific. Its Immunology and Dermatology products include Neoral, Myfortic, Zortress/Certican, Ilaris, Xolair and Cosentyx. Neoral (cyclosporine, USP Modified) is an immunosuppressant to prevent organ rejection following a kidney, liver, or heart transplant. Neoral is also approved for use in lung transplant in many countries outside of the US. This micro-emulsion formulation of cyclosporine is also indicated for treating selected autoimmune disorders such as psoriasis and rheumatoid arthritis. Myfortic (enteric-coated formulation of mycophenolate sodium) is approved in more than 90 countries for the prevention of acute rejection of kidney allografts, and is indicated in combination with cyclosporine and corticosteroids. Zortress/Certican (everolimus) is an oral inhibitor of the mTOR pathway, indicated to prevent organ rejection following solid organ transplantation.

The Company’s Retina product includes Lucentis. Lucentis (ranibizumab) is a recombinant humanized high affinity antibody fragment that binds to vascular endothelial growth factors (VEGF). Its Respiratory products include Xolair, TOBI Podhaler, Arcapta Neohaler/Onbrez Breezhaler, Seebri Breezhaler and Ultibro Breezhaler. Xolair (omalizumab) is the humanized monoclonal antibody approved for the treatment of moderate to severe persistent allergic asthma in the United States in adolescents (aged 12 and above) and adults. Xolair is approved in more than 90 countries, including the United States and the EU. It is approved for severe persistent allergic asthma in the EU in children (aged six and above), adolescents and adults. TOBI Podhaler (tobramycin inhalation powder) is an inhaled dry powder formulation of the antibiotic tobramycin, delivered using a simple and portable patient-friendly device. Arcapta Neohaler/Onbrez Breezhaler (indacaterol) is a once-daily long-acting beta2-adrenergic agonist (LABA) administered in a single-dose dry powder inhaler indicated for maintenance bronchodilator treatment of airflow obstruction in adult patients with chronic obstructive pulmonary disease (COPD).

The Company’s Neuroscience products include Gilenya, Exelon, and Comtan and Stalevo. Gilenya (fingolimod) is the oral therapy approved to treat relapsing-remitting multiple sclerosis (RRMS) and a class of compounds called sphingosine 1-phosphate receptor modulators. In the US, Gilenya is indicated for relapsing forms of multiple sclerosis (MS). In the EU, Gilenya is indicated for adult patients with high disease activity despite treatment with at least one disease modifying agent, or evolving severe relapsing-remitting MS. Exelon (rivastigmine tartrate) and Exelon Patch (rivastigmine transdermal system) are cholinesterase inhibitors indicated for the treatment of Alzheimer’s disease (AD) dementia and Parkinson’s disease (PD) dementia. Comtan (entacapone) and Stalevo (carbidopa, levodopa and entacapone) are indicated for the treatment of patients with Parkinson’s disease who experience end of dose motor (or movement) fluctuations, known as wearing off.

The Company’s Established Medicines include Diovan, Exforge, Voltaren/Cataflam, Ritalin, Ritalin LA, Focalin and Focalin XR, and Tegretol. Diovan (valsartan), together with Diovan HCT/Co-Diovan (valsartan and hydrochlorothiazide), is an angiotensin II receptor blocker (ARB) and is an anti-hypertensive medications across the world. Exforge (valsartan and amlodipine besylate) is a single-pill combination of the ARB Diovan and the calcium channel blocker amlodipine besylate. Voltaren/Cataflam (diclofenac sodium/potassium/resinate/free acid) is a non-steroidal anti-inflammatory drug (NSAID) for the relief of symptoms in rheumatic diseases, such as rheumatoid arthritis and osteoarthritis, and for various other inflammatory and pain conditions. Tegretol (carbamazepine) is indicated for epilepsy (partial seizures, generalized tonic clonic and mixed forms of seizures), acute mania and maintenance treatment of bipolar disorders, alcohol withdrawal syndrome, trigeminal neuralgia, glossopharyngeal neuralgia, painful diabetic neuropathy, diabetes insipidus centralis and polyuria and polydipsia of neurohormonal origin.

Alcon

The Company’s Alcon Division discovers, develops, manufactures, distributes and sells eye care products across the world. Alcon is engaged in eye care and offers a range of products serving the lifecycle of patient needs across eye diseases, vision conditions and refractive errors. To meet the needs of ophthalmologists, surgeons, optometrists, opticians and physician specialists, Alcon operates with three franchises: Surgical, Ophthalmic Pharmaceuticals and Vision Care. Alcon products are available in more than 180 markets. Each franchise operates with specialized sales forces and marketing support.

The Company’s Alcon Division’s Surgical franchise is engaged in providing ophthalmic surgical product, offering ophthalmic surgical equipment, instruments, disposable products and intraocular lenses for surgical procedures that address cataracts, vitreoretinal conditions, glaucoma and refractive errors. Alcon’s Surgical portfolio includes the Cataract Refractive Suite by Alcon, a suite of equipment to help plan and perform some of the most challenging steps of cataract surgery with automation and precision. The portfolio also includes the Infiniti vision system to perform cataract surgeries, which is the phacoemulsification platform, the Constellation vision system for retinal operations, and the WaveLight refractive suite for refractive procedures and Lasik treatments. Alcon also offers the AcrySof family of intraocular lenses (IOLs) to treat cataracts, including the AcrySof IQ, AcrySof IQ ReSTOR, AcrySof IQ Toric and AcrySof IQ ReSTOR Toric IOLs. In addition, Alcon provides advanced viscoelastics, surgical solutions, surgical packs and other disposable products for cataract and vitreoretinal surgery.

The Company’s Alcon Division’s Ophthalmic Pharmaceuticals franchise develops and markets a range of pharmaceuticals to treat chronic and acute conditions of the eye including glaucoma, elevated intraocular pressure (associated with glaucoma), eye infection and inflammation, eye allergies, dry eye and retinal diseases. Ophthalmic Pharmaceuticals also oversees the line of OTC brands that include artificial tears and ocular vitamins. Product highlights within the Ophthalmic Pharmaceuticals portfolio include Ilevro ophthalmic suspension for the treatment of pain and inflammation associated with cataract surgery; Simbrinza suspension to lower intraocular pressure as a fixed-dose combination; Travatan Z, Izba and DuoTrav, each ophthalmic solutions for the treatment of elevated intraocular pressure associated with open-angle glaucoma or ocular hypertension; Vigamox ophthalmic solution for bacterial conjunctivitis; Pataday ophthalmic solution for ocular itching associated with allergic conjunctivitis; Nevanac ophthalmic suspension for eye pain and inflammation following cataract surgery and to reduce the risk of macular edema associated with cataract surgery in diabetic patients; the Systane family of over-the-counter products for dry eye relief, and Jetrea intravitreal injection for treating vitreomacular traction, including when associated with macular hole of diameter less than or equal to 400 microns.

The Company’s Alcon Division’s Vision Care franchise develops and markets contact lenses and lens care products. Alcon’s portfolio of silicone hydrogel, daily disposables and color contact lenses includes its Air Optix, Dailies and Freshlook brands. Its Dailies product line includes Dailies Total1 lenses, a water gradient contact lens. Its Air Optix product line includes the Air Optix Colors silicone hydrogel contact lenses. Its contact lens care solutions business includes the Opti-Free line of multi-purpose disinfecting solutions and drops, as well as the Clear Care and AOSept Plus hydrogen peroxide lens care solutions.

Sandoz

The Company’s Sandoz Division is engaged in developing, manufacturing and marketing generic pharmaceutical products, follow-on biopharmaceutical products known as biosimilars, and drug substances that are not protected by valid and enforceable third-party patents. Sandoz is organized in three franchises across the globe: Retail Generics, Anti-Infectives and Biopharmaceuticals & Oncology Injectables. In Retail Generics, Sandoz develops, manufactures and markets active ingredients and finished dosage forms of pharmaceuticals to third-parties. Retail Generics includes the specialty areas of Dermatology, Respiratory and Ophthalmics, as well as cardiovascular, metabolism, central nervous system, pain, gastrointestinal and hormonal therapies.

In Anti-Infectives, Sandoz manufactures active pharmaceutical ingredients and intermediates, mainly antibiotics for internal use by Retail Generics and for sale to third-party customers. In Biopharmaceuticals, Sandoz develops, manufactures and markets protein or other biotechnology-based products (known as biosimilars or follow-on biologics) and provides biotechnology manufacturing services to other companies, and in Oncology Injectables, Sandoz develops, manufactures and markets cytotoxic products for the hospital market. Sandoz has launched a number of products in various countries in the fiscal year ended December 31, 2014, including Valsartan (Diovan), Cyclophosphamide injection, USP, AirFluSal Forspiro, Kerydin (tavaborole) topical solution, 5%, Vitaros (alprostadil), Dexmethylphenidate ER (Focalin XR), Tobramycin inhalation solution, USP (TOBI), Calcipotriene and betamethasone dipropionate ointment, (Taclonex, Leo Pharma), Adapalene gel (Differin, Galderma Laboratories), Lansoprazole capsules, amoxicillin capsules, USP and clarithromycin tablets, USP (PREVPAC, Takeda Pharmaceuticals), Decitabine (Dacogen, Eisai), Escitalopram (Cipralex, Lundbeck), and Mometasone (Nasonex, Merck Sharp & Dohme).

Consumer Health

Consumer Health consists of OTC Division. OTC division has its own research, development, manufacturing, distribution and selling capabilities. OTC offers readily available consumer medicine. Its OTC Division is engaged in offering products designed for self-care and prevention of common medical conditions and ailments to enhance people’s overall health and well-being. The business of OTC is conducted by a number of affiliated companies in more than 50 countries. The OTC business focuses on a group of strategic global brands in product categories that include treatments for cough/cold/respiratory ailments (Theraflu and Otrivin) and pain relief (Excedrin and over-the-counter Voltaren), as well as products for digestive health (Benefiber and Prevacid24HR), dermatology (Lamisil and Fenistil), and smoking cessation (Nicotinell).

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