Novartis CEO Vas Narasimhan is giving the Swiss pharma a huge makeover even ahead of a possible spinoff of generics unit Sandoz, pushing out three C-level executives with an expected layoff round.
Novartis will no longer have oncology and pharmaceuticals as two separate commercial departments. Instead, all Novartis products will merge into one innovative medicines unit to be managed under U.S. and international markets organizations, the company said Monday.
Simultaneously, Novartis is creating a new position in charge of corporate strategy, R&D portfolio strategy and business development, carving out some responsibilities from the head of drug development.
As a result, Susanne Schaffert, Ph.D., president of Novartis Oncology, is left without a job. Marie-France Tschudin, Schaffert’s counterpart on the pharmaceuticals side, will transition to head up international operations and also bear the title of chief commercial officer. As for the U.S. market, Victor Bulto, who was the U.S. head of pharmaceuticals, has been elevated to lead all U.S. commercialization across therapeutic areas.
The combination will trigger some job cuts, a Novartis spokesperson told Fierce Pharma, but it’s too early to speculate which roles and how many.
Chief Medical Officer John Tsai, M.D., is also leaving Novartis. To fill his role, Novartis has brought back a 20-year company veteran in a move that suggests potential deeper venture into RNA interference (RNAi) therapies.
Shreeram Aradhye, M.D., will become Novartis’ new CMO starting May 16. Aradhye was most recently chief medical officer at RNAi specialist Dicerna Therapeutics, which was just acquired by Novo Nordisk for $3.3 billion.
Novartis already markets Leqvio, a PCSK9-targeted RNAi therapy developed with technology from Alnylam Pharmaceuticals. During a recent investors’ event, Narasimhan highlighted RNA therapy as one of the company’s key technology platforms alongside cell and gene therapy and radiopharmaceuticals.
As for the newly created role of chief strategy and growth officer, Novartis said the search is underway for the right talent and that Lutz Hegemann, M.D., Ph.D., president of global health, will lead the function in the interim.
That leader oversees the corporate strategy team, a new portfolio strategy and analytics team, a new strategic competitive intelligence team and an integrated BD team, a Novartis spokesperson told Fierce Pharma. The function will focus on strengthening Novartis’ pipeline, independent of the R&D and commercial teams, the company added.
In another internal reorg, Novartis is integrating all general and administrative functions as well as technical operations and customer solutions “to generate economies of scale, drive productivity and create a strong technology and operational foundation.”
Taking a broader purview, Steffen Lang, currently head of Novartis’ technical operations, will become president of operations. Robert Weltevreden, who leads customer and technology solutions, will join Schaffert and Tsai on the trip out the door.
“The simpler organizational model we are unveiling today is central to our growth strategy as it will make us more agile and competitive, enhance patient and customer orientation, unlock significant potential in our R&D pipeline and drive value-creation through operational efficiencies,” Narasimhan said.
After the revamp, Novartis expects annual cost savings of at least $1 billion by 2024. The company also reiterated its ambition to achieve 4% compounded annual sales growth between 2020 and 2026. It expects a margin in the high 30s in the midterm and more than 40% in the mid- to long term.
“[The] new simplified structure and operational set-up supports Novartis strategy as a focused medicines company and is designed to power next phase of innovation, growth and productivity,” the company said.
The restructuring comes independent of an ongoing strategic review of generics-focused Sandoz. Novartis is still looking all options, ranging from retaining the business to separation, the Novartis spokesperson confirmed to Fierce Pharma. The company has said it will make a decision on the unit’s fate this year.