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Pharma Merck, Bayer’s trial win for heart failure rival could actually boost Novartis’ Entresto

Novartis’ Entresto, the clear-cut market leader in heart failure, has been soul-searching since its highly touted trial in an untreated population fell flat. Now, a surprise competitor has cropped up—but Merck and Bayer’s upstart could actually give Novartis a boost.

Merck & Co. and Bayer’s surprise phase 3 trial win for vericiguat—as an add-on to standard-of-care for worsening heart failure patients with a reduced ejection fraction—actually included Entresto as one standard-of-care option.

And that could help pair the new blockbuster-in-the-making to Novartis’ drug––a potential “rising tide lifts all boats” scenario, analysts said.

In a Monday note to investors, SVB Leerink analysts said Merck and Bayer’s decision to pursue a phase 3 trial after the drug flopped its phase 2 monotherapy trial could tie the drug’s chances to Entresto’s blockbuster sales and help both meds commercially. 

“This design could now be an advantage—flipping a competitive dynamic into a combination dynamic (assuming a large enough subgroup of patients did receive Entresto SoC),” the analysts wrote. “This detail and others will be important in understanding how vericiguat will compete among an increasingly competitive group of branded therapies in heart failure.”

Vericiguat’s win could also be a non-issue for SGLT2 diabetes meds like AstraZeneca’s Farxiga, which have also shown some benefit in heart failure. According to Evercore ISI analyst Umer Raffat, Vericiguat’s focus on worsening chronic heart failure patients doesn’t impede SGLT2s’ pathway, focusing instead on a new indication. 

Vericiguat, a guanylate cyclase stimulator, is also being studied in heart failure patients with a preserved ejection fraction, the same population in which Entresto flopped a phase 3 in July. However, sub data from that trial presented this past weekend gave Novartis hope that it can make another run at those patients. 

Heart failure patients with an ejection fraction below 57% showed a stronger clinical response to Entresto than patients with ejection fractions above that threshold, according to a combined subanalysis from the Paragon-HF and Paradigm-HF trials presented Saturday at the American Heart Association Scientific Sessions. 

Heart failure ejection fractions below 40% are usually defined as “reduced”––an indication in which Entresto is already approved to reduce the risk of CV death and hospitalizations––while fractions above 40% are defined as “preserved,” an indication which currently has no approved treatment.

Novartis also presented a separate subanalysis from the Paragon-HF trial showing female heart failure patients with a preserved ejection fraction showed a stronger clinical response to Entresto than male patients. 

Assuming Novartis spins that data into another trial for preserved ejection fraction patients, it could help the drug continue to boost its booming sales. 

In the third quarter, Entresto brought in $1.6 billion, and the consensus estimate for peak sales currently sits at around $4 billion, according to Umer Raffat. 

Raffat noted to investors Monday that vericiguat still has much to prove.  Online top-line data are yet available from its Victoria study, after all.

And when details emerge, market-watchers will be looking for a 20% CV risk reduction on top of standard-of-care––particularly as an add-on to Entresto, Raffat figures.

“Vericiguat still needs to show strong data to have real commercial uptake,” he wrote.