Novartis splits pharma division, shakes up management team



Novartis announced Tuesday that it will split its pharmaceuticals business into two separate divisions, with one housing its portfolio of cancer drugs and the other its branded drug unit.

The Swiss company said the two new business units, Novartis Pharmaceuticals and Novartis Oncology, will form the newly created Innovative Medicines division at Novartis.

See also: Novartis launches DTC campaign for Entresto

The restructuring, which is said to reflect Novartis's renewed emphasis on oncology, also led to a shakeup in senior leadership. Paul Hudson, currently EVP of North America at AstraZeneca, will take over as CEO of Novartis Pharmaceuticals while Bruno Strigini, a Novartis executive, will become CEO of Novartis Oncology.

David Epstein, division head and CEO of Novartis Pharmaceuticals, is departing the company to explore “new challenges,” Novartis said in a release. Epstein was responsible for the development and commercialization of a number of new medicines from Novartis including Gleevec, Gilenya, Cosentyx, and Entresto.

Bernstein analyst Tim Anderson in an investor note described the company as a “revolving door” based on recent senior management changes. However, he also said that splitting the oncology business from the rest of the pharma business is “not terribly unusual and it doesn't appear to be very different from the how the division has effectively been reorganized anyway.”

See also: Novartis considers new sales model for experimental cancer therapy

Epstein is not the first big leadership change for Novartis this year. In January, the company replaced Jeff George, its head of the Alcon eye care business unit at the time, with Michael Ball, the former CEO of Hospira, which was acquired by Pfizer. Christi Shaw, the U.S. lead for Novartis, also decided to step down from her role for family reasons in April.

A Novartis spokesperson said in a statement that the drugmaker expects the changes to increase the drugmaker's focus and improve its execution. Rainer Boehm, the company's chief commercial and medical affairs officer, will act as interim head of the pharmaceuticals division until July 1. 

Entresto, the drugmaker's recently approved heart-failure treatment, has had disappointing sales following its approval in July. Novartis has cited cardiologists' reluctant to advocate for insurance coverage for new drugs in addition to poor access for the drug's sluggish start out of the gate.

The company has launched DTC campaigns to help turn around sales; the most-recent DTC spot, dubbed Tomorrow, features Entresto users singing the popular song of the same name from the musical Annie. That ad represents a thematic 180 from its campaign, Rising Waters. That spot showed a man reading the newspaper while water slowly rises around him, accompanied by the tagline “with heart failure, danger is always on the rise.” Some critics have called the ad alarmist and disturbing.

close

Next Article in Corporate