While it’s easy to get caught up in the hype of the biotech industry as dramatic news announcements are a common thing, it’s also easy to forget that not all of these breakthroughs are justified.
In the worst-case scenario, many of these results can be outright fabricated, whether intentionally or otherwise. That’s exactly what appears to have happened with Swiss pharmaceutical giant Novartis (NYSE: NVS), which had fired two scientists at its AveXix unit for manipulating data to gain the approval for its gene therapy treatment Zolgensma.
Earlier on Wednesday, AveXix announced that it combined the roles of chief scientific officer and senior vice president of research into one position. Previously, these two roles were held by two brothers and scientific experts, Brian Kaspar and Allan Kaspar.
The story came out that the two brothers were fired as a person familiar with the matter claimed that the two were quietly disposed of for altering data and breaking scientific ethics.
Last week, the Food and Drug Administration (FDA) threatened to take civil or criminal action against the company, saying that the drugmaker used data that it knew to be incorrect in its application for a $2.1 million gene therapy to treat the rare childhood disease spinal muscular atrophy.
While both the FDA and Novartis have gone on to say that the manipulation didn’t impact the evidence supporting Zolgensma’s safety and that the drug should remain on the market, it does question how it was possible for this deception to go on for so long.
“First and foremost, we are fully confident in the safety, quality and efficacy of Zolgensma. The FDA supports the continued marketing and use of Zolgensma for patients with spinal muscular atrophy (SMA) less than 2 years of age,” read a recent statement from the company in regards to the FDA findings. “We maintain that the totality of the evidence demonstrating the product’s effectiveness and its safety profile continue to provide compelling evidence supporting an overall favorable benefit-risk profile. We remain steadfast that this important treatment remain available to pediatric patients with SMA less than 2 years of age.”
Shares of Novartis fell by 2.3 percent in response to the news. Over the past few months, the stock has largely struggled to gain value while the general market continues to surge. Starting from March, shares of Novartis rose from $80 to around $95 in July before reaching $89 as of today.
Most analysts have a “strong buy” rating on the stock, while there are a handful of experts who have either a “hold” or “sell” rating on the company. Currently, the consensus start price for the stock is at $100 per share, implying a 13 percent growth
Novartis Company Profile
Novartis AG develops and manufactures healthcare products through two segments: Innovative Medicines and Sandoz. It generates the vast majority of its revenue from Innovative Medicines segment consisting global business franchises in ophthalmology, neuroscience, immunology, respiratory, cardio-metabolic, and established medicines. The company sells its products globally, with the United States representing close to one third of total sales. – Warrior Trading News
