Novartis stock popped Thursday — prompting rival Travere Therapeutics to slide — after winning Food and Drug Administration approval for a kidney disease treatment.
Late Wednesday, the FDA signed off on Vanrafia, Novartis' treatment for IgA nephropathy, a chronic condition in which immunoglobulin A antibodies accumulate in the kidneys. This damages the small filters in the kidneys that remove waste products from the blood. Vanrafia won an accelerated approval, meaning its continued marketing is contingent on a confirmatory study.
Travere's Filspari treats IgA nephropathy. But it comes with required monitoring for liver toxicity. This could give Novartis' drug a slight advantage. However, Leerink Partners analyst Joseph Schwartz said the FDA will consider removing the liver monitoring requirement for Filspari in late August. Wedbush analyst Laura Chico says uptake has been strong for Filspari despite the requirement.
"We do see Filspari as well positioned particularly with an increasing body of data supporting its use with other agents," she said in a report.
But Novartis stock climbed 1.4% to close at 112.26 as Travere stock fell 7.7%, closing at 16.56.
Novartis Stock: A Long History Behind Atrasentan
There's a long history behind atrasentan, the drug that became Vanrafia. It's an endothelin A receptor antagonist. These drugs bind to, and block, the action of endothelin to widen the blood vessels. Doing so can help reduce excess protein in the urine and protect the kidneys.
Leerink's Schwartz said he expects the FDA to consider liver toxicity "an unavoidable class effect" for these drugs. This is why Filspari, which belongs to the same class, has a liver monitoring requirement.
But atrasentan's history says otherwise.
Before Novartis acquired Chinook Therapeutics, the company that developed atrasentan, AbbVie, was the main sponsor of the drug. Chinook later bought the worldwide rights to atrasentan before Novartis bought Chinook for $3.2 billion in 2023.
At the end of its Phase 2 meeting with the FDA, AbbVie was told there would be no liver monitoring requirement for atrasentan if there weren't any liver toxicity side effects in further testing, Schwartz says. It appears the agency stuck to its promise.
"Given Filspari's pristine safety profile, and considering the therapy was still approved with a REMS (Rick Evaluation and Mitigation Strategy) program, we are modestly surprised that the FDA did not follow suit with atrasentan as well," he said. "Nonetheless, the liver monitoring requirement has not been a barrier for growth for the Filspari launch, which has been progressing well."
Travere Therapeutics' Growing Filspari Market
Schwartz says the IgA nephropathy market is big enough for multiple companies. Wedbush's Chico says Filspari is well positioned to compete with Vanrafia.
"Competition is already a known in the IgAN space. TVTX continues to assemble additional data sets supporting the use of Filspari in combination with other agents and, as IgAN increasingly becomes a poly-pharmacy market, this will be important," Chico said.
Travere Therapeutics is also working to move Filspari into other disease areas. This notably includes focal segmental glomerulosclerosis, or FSGS. In this condition, scar tissue builds up on the filters in the kidneys.
This would open Filspari up to "another large market, with virtually zero competition," Leerink's Schwartz said.
He has an outperform rating on Travere Therapeutics stock.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
