Novartis (NYSE:NVS) Update / Briefing November 20, 2025 04:15 AM ET Company ParticipantsNaresh Chouhan - PrincipalDianne Auclair Rocha - U.S. Therapeutic Area Head for CRMBob Baloh - Global Head of Neuroscience Biomedical ResearchReshema Kemps-Polanco - Chief Commercial Officer of the U.S. UnitVictor Bulto - President of the U.S. UnitRuchira Glaser - Global Head of CRM DevelopmentShaun Coughlin - Global Head of Cardiovascular and Metabolism Biomedical ResearchHarry Kirsch - CFOMukul Mehta - Head of Business ...

Core Insights - The lipid-lowering market is projected to reach $35 billion, with some drugs entering the long-term prevention field for cardiovascular event risk reduction (CVRR) [1][2] - Two significant lipid-lowering drugs are expected to report critical Phase III results in 2026, targeting PCSK9 and Lp(a) [1][2] - The development of cardiovascular and cardiac drugs is entering a harvest phase, with a focus on Phase III progress [1] Group 1: Key Developments in Lipid-Lowering Drugs - Novartis' PCSK9 small nucleic acid Leqvio and ASO drug Pelacarsen are under close observation for their Phase III trials, which could expand the market for lipid-lowering therapies [1][2] - Merck's MK-0616, the first oral cyclic peptide PCSK9 to enter Phase III, is expected to influence the long-term trajectory of the PCSK9 market [2] Group 2: Emerging Targets and Innovations - Arrowhead Pharmaceuticals' Plozasiran (ARO-APOC3) is set for FDA approval for treating familial chylomicronemia syndrome (FCS), marking a significant advancement in the siRNA field [3] - Eli Lilly's Lp(a) small molecule inhibitor Muvalaplin has initiated Phase III trials, with plans to enroll 10,450 participants, expected to complete by 2031 [3] Group 3: Direct-to-Consumer (DTC) Transformation - Major pharmaceutical companies like Eli Lilly, AbbVie, and Pfizer are launching online Direct-to-Consumer platforms, breaking traditional barriers in drug sales [4] - This shift aims to attract more self-paying users, particularly in the chronic disease sector, which is anticipated to capture the largest market share in the future [4]

智通财经APP获悉，招商证券国际发布研报称，降血脂市场未来有望达350亿美金，但部分降血脂药物 将进一步进入降低心血管事件风险(CVRR)的长期预防领域。2026年心血管界将有两款重磅降血脂药物 迎来关键三期结果，分别针对两大靶点PCSK9和Lp(a)，密切关注诺华PCSK9小核酸Leqvio的ORION-4 三期和ASO药物Pelacarsen的HORIZON三期试验。此外，默沙东的MK-0616作为全球首个进入三期的口 服环肽PCSK9，未来也将对PCSK9市场的长期走向带来影响。 招商证券国际主要观点如下： 心血管及心脏学新药研发将进入收获期，关注三期进展 以动脉粥样硬化性心血管疾病（ASCVD）为主的心血管疾病（CVD）是我国城乡居民第1位死因，低密 度脂蛋白胆固醇（LDL⁃C）是ASCVD的致病性危险因素。近年来，欧美心血管界将包含载脂蛋白B的 脂蛋白a (Lp(a)) 也提升到独立风险因素之一。Lpa升高是冠心病、缺血性脑卒中、外周血管疾病、冠状 动脉钙化及钙化性主动脉瓣狭窄等的独立危险因素。除此之外，炎症风险也和长期心血管事件相关。 此外，默沙东的MK-0616作为全球首个进入三期的口服环肽PC ...

Core Insights - Novartis will present data from 19 abstracts related to its cardiovascular portfolio at the 2025 European Society of Cardiology Congress in Madrid from August 29 to September 1, 2025 [2][3] - The company aims to showcase innovative treatments that can significantly improve cardiovascular outcomes, focusing on established treatments like Entresto and Leqvio, as well as pipeline assets such as pelacarsen and abelacimab [3][7] Presentation Highlights - Pelacarsen will be featured in multiple presentations, including its effect on reducing the need for lipoprotein apheresis in patients with elevated lipoprotein(a) and cardiovascular disease [4][5] - Leqvio's impact on patient quality of life will be highlighted in two VictORION studies, along with its efficacy as a cholesterol-lowering monotherapy [5][6] - The PARACHUTE-HF study will evaluate the efficacy and safety of Entresto in treating heart failure with reduced ejection fraction due to chronic Chagas disease [5][6] Research Focus - Novartis is dedicated to addressing significant unmet needs in cardiovascular disease through advanced science and technology, particularly in genetically driven risk factors and common heart conditions [7][10] - The company collaborates with patients, healthcare professionals, and organizations globally to enhance cardiovascular care beyond medication [8][10]

Investment Rating - The report maintains a "Positive" outlook for the pharmaceutical and biotechnology industry in China [6]. Core Insights - Small nucleic acid drugs are expected to become the third major class of drugs after small molecules and antibodies, with unique advantages such as broad targets, strong specificity, high development efficiency, and long dosing intervals [9][38]. - The commercialization of rare diseases is maturing, and the long-term advantages for chronic diseases are becoming evident, with significant sales growth for products like Spinraza and Leqivo [9][60]. - There is a notable increase in business development (BD) activities, highlighting the potential of early-stage chronic disease pipelines [9]. Summary by Sections 1. Small Nucleic Acids: Potential as a New Drug Class - Small nucleic acid drugs, including ASO, siRNA, and Aptamer, interact with mRNA to regulate gene expression, offering a new technological pathway for drug development [13]. - The global market for small nucleic acid drugs has grown from $1.04 billion in 2017 to $5.09 billion in 2024, with a CAGR of 25.5% [60]. 2. Milestones in Overseas and Domestic Markets - In the overseas market, significant developments are expected in the TTR field and cardiovascular diseases, with drugs like Vutrisiran and Pelacarsen showing promise [9]. - In China, new therapies for chronic hepatitis B and competitive advancements in cardiovascular drugs are emerging, with several companies making progress in their pipelines [9][60]. 3. Investment Recommendations and Targets - The report suggests focusing on high-quality domestic companies involved in the development of small nucleic acid drugs targeting chronic hepatitis B and cardiovascular diseases, such as HengRui Medicine, China National Pharmaceutical Group, and others [9].

Core Viewpoint - The article discusses a significant transaction involving Heng Rui, where Merck pays a total of $2 billion, including a $200 million upfront payment, to address market skepticism regarding Heng Rui's innovation capabilities [2][3]. Group 1: Transaction Details - The agreement includes a $200 million upfront payment, $1.77 billion in milestone payments, and a percentage of sales, which is expected to provide immediate financial benefits to Heng Rui in Q2 [3]. - The $200 million upfront payment translates to approximately 14.5 billion yuan in net profit, equivalent to about 63 billion yuan in product revenue, reflecting the contribution of Heng Rui's commercialization team for a quarter [7]. Group 2: Market Context and Valuation - Heng Rui has faced criticism regarding its valuation logic, as it has matured beyond the small-cap stage and has a well-established system, making traditional valuation methods less applicable [8]. - Previous deals by Heng Rui, aside from a notable €150 million upfront payment with Merck, were generally in the millions, primarily covering early-stage R&D costs [9]. - The market's response to Heng Rui's previous large upfront payment was skeptical, questioning the sustainability of such deals, but recent successes have demonstrated Heng Rui's ability to generate profits through substantial business development [11]. Group 3: Industry Trends - The article highlights a shift in the pharmaceutical industry from a focus on oncology and autoimmune diseases to chronic disease treatments, as evidenced by recent breakthroughs from Heng Rui and another Chinese company, Shiyao [20]. - The chronic disease market presents significant unmet clinical needs, with a growing number of patients suffering from conditions like hypertension and diabetes, indicating a potential for innovation and investment in this area [19][20].

Core Viewpoint - HengRui Medicine has entered into a licensing agreement with Merck to develop and commercialize the HRS-5346 project, a significant move in the pharmaceutical industry targeting Lp(a) as a cardiovascular risk factor [1][2]. Group 1: Licensing Agreement Details - The agreement allows Merck exclusive rights to develop, produce, and commercialize HRS-5346 outside Greater China, with an upfront payment of $200 million and potential milestone payments of up to $1.77 billion, plus sales royalties [1]. - The agreement is expected to take effect in the second quarter, but the approval and milestone payment timelines for HRS-5346 remain uncertain [1]. Group 2: Lp(a) and Cardiovascular Disease - Elevated Lp(a) is an independent risk factor for atherosclerotic cardiovascular disease (ASCVD), affecting approximately 1.4 billion people globally, with traditional medications showing limited efficacy in lowering Lp(a) levels [2][3]. - Current treatments, including statins and PCSK9 inhibitors, have limited impact on Lp(a), necessitating the development of targeted therapies [2][3]. Group 3: HRS-5346 and Market Potential - HRS-5346 works by blocking the covalent binding of apolipoprotein(a) with low-density lipoprotein (LDL), significantly reducing Lp(a) levels and improving atherosclerosis risk [3]. - As an oral small molecule drug, HRS-5346 offers better patient compliance and has the potential to become a market breakthrough [3]. Group 4: Industry Trends and Competitors - The development of Lp(a) inhibitors signifies a shift in cardiovascular treatment from broad lipid-lowering strategies to precision-targeted therapies, with several companies, including Novartis and Eli Lilly, advancing their own Lp(a) targeting drugs [4]. - Other domestic companies such as Jingxin Pharmaceutical, Xinlitai, WuXi AppTec, and Shiyao Group are also exploring this target, currently in preclinical stages [4].