Nomura ups sales forecast for Novartis's new oral MS drug Gilenya to $3.5 billion, as Biogen Idec says it is still confident about non oral products

Analysts at Nomura have described the US Food and Drug Administration’s approval of Swiss drug major Novartis’ (NOVN: VX) Gilenya (fingolimod), the first oral treatment for multiple sclerosis to get US clearance (The Pharma Letter September 22) as the dawn of a new “Gillennium” for MS.

As a result of what they see as far less restrictive than consensus expectations for labeling imposed by the FDA, they have raised their revenue forecast for the drug to $3.5 billion, from a previous $2 billion. The analysts also said they were bullish on Novartis, whose stock trades at 8% discount to sector (8.7x versus 9.4x) on 2012 earnings per share despite an 8.5% EPS compound annual growth rate (CAGR) vs sector 2.9%, and have put a price target on the shares of 65 Swiss francs, as well as at EPS forecast of 5.23 francs for the current year and 5.96 francs for next year.

They see Gilenya use in 24% MS patients who do not currently take disease modifying drugs (DMDs) and in ~22% DMD users (patients taking injectables such as Avonex, Rebif, Betaseron, Copaxone), saying “We see consensus rising from $1 billion as label is not second line and does not involve severe restriction or heavy compliance – affecting monitoring burden.