Daniel Vasella

Novartis to cut reps, reassign execs

Tracy Staton — Mon, 20 Oct 2008 09:15:19 -0400

Hundreds of Novartis sales reps will soon join their rivals in the unemployment line. The layoffs come as the Swiss drugmaker reports a 69 percent drop in third-quarter income--largely off of unusual expenses this year and unusual profit-boosters in 2007--and announces a shuffle in top management.

Some 550 U.S. sales positions face the axe, and those that remain will be divided among five regional units. It's a "new model" specifically for U.S. sales, and Novartis hopes that the regional realignment will help reps meet "the diverse needs of multiple customers." The company also thinks the changes will make sales more efficient; hence the need for fewer reps. More than half the jobs cut will be already vacant positions, so fewer than 300 working reps will be laid off.

Meanwhile, Novartis extended CEO Daniel Vasella's (photo) contract, and he tapped his vaccines and diagnostics chief, Joerg Reinhardt (photo), to be COO. Andrin Oswald (photo), chief of the recently acquired Speedel, will now take the helm at vaccines and diagnostics. George Gunn, who's been in charge of the animal health unit, takes over as head of consumer health for Thomas Ebeling, who's leaving. And Andreas Rummelt (photo), now Sandoz chief, will take a new position as head of quality assurance and technical ops; Jeff George will take over at Sandoz.

As for third-quarter numbers, net dropped to $2.1 billion from $6.9 billion, but sales leapt by 12 percent to $10.75 billion. And within those sales numbers lie some encouraging pharma increases, including a 20 percent hike in cardiovascular sales to $1.7 billion, led by Diovan. Cancer therapy Gleevec grew by 15 percent to $950 million, and vaccines and diagnostics expanded revenues by 16 percent.

- check out the Novartis press release
- read the story at MarketWatch

Vasella: 'Teva is better than we are'

Tracy Staton — Thu, 05 Jun 2008 09:44:12 -0400

Novartis CEO Daniel Vasella has a knack for the quotable quote. Here's the latest: "Teva is better than we are, and that's hard to take."

You'll recall that Vasella has been talking a lot about diversification lately, what with Novartis beefing up its optical biz with a big chunk of Alcon and pushing to expand its vaccine operations. Well, the company's generics unit, Sandoz, is another big component of that diversification strategy. And Vasella isn't satisfied with Sandoz's performance. Teva is bigger, it's vertically integrated--and it's been outpacing Sandoz on various key benchmarks. In a glass-half-full take on the difference, Vasella told the WSJ Health Blog that Teva's successes could serve as inspiration. "It is good to look at how we could be better," he said.

- read the Health Blog post

Swiss pricing pressure angers Vasella

Tracy Staton — Tue, 27 May 2008 10:09:32 -0400

Daniel Vasella (photo) is riled. The Novartis CEO says its hometown officials are putting too much pressure on drug prices. Swiss Interior Minister Pascal Couchepin should keep in mind that reduced prices could interfere with innovation--and would lower Novartis' tax revenues, too. (The company pays $488 million or so to the Swiss government each year.) "The pressure from (Couchepin) is too strong,” he told the Berner Zeitung. “Drugs in Switzerland are now cheaper than in Germany.”

Meanwhile, Novartis may be celebrating the EU's OK to sell its new Extavia MS drug. Rightfully so. But even after launching the drug--first in a new portfolio of Novartis treatments for MS--the company has, shall we say, a long row to hoe. Extavia will face stiff competition from existing drugs such as Bayer's Betaseron. It could take a couple of years for Novartis to penetrate the MS market in any significant way, analysts say. "It is difficult to know what market percentage Novartis is going to achieve with this new drug," Tom Muller, an analyst with Theodoor Gilissen, told Forbes.com. "They have to start from scratch."

- see the Forbes article on Extavia
- check out the Pharmalot item on Vasella

Vasella shaking up Novartis ops

Tracy Staton — Tue, 20 May 2008 09:35:49 -0400

Quick, name the top three challenges Big Pharma faces. Generics? Pricing pressure? Tough regulatory environment? If they're not the top three, they're at least significant enough for Daniel Vasella to build his remake of Novartis around them. They've depressed sales and profits at Novartis--and, in turn, the stock has dropped by a quarter over the past year.

So, enter Vasella with his new management team, bureaucracy fighting, R&D restructuring, and diversification projects. Let's take the last one first. Last month, Novartis made a deal for the eye-care company Alcon, and Vasella is also pushing aggressively into generic drugs and vaccines. His new right-hand man Joe Jimenez is slashing 25 percent of the HQ jobs, trying to cut through bureaucracy and red tape that has separated Vasella from his team and hamstrung operations. The R&D group is getting reorganized into small teams of eight people or so; they're tasked with spotting potential safety or regulatory problems early on and working with drug watchdogs to iron them out long before approval applications are submitted. And to tackle insurers' reluctance to pay big bucks for new drugs, Jimenez has started four pilot projects to improve Novartis' relationships with payers.

- read the story in the Wall Street Journal

Novartis' Daniel Vasella - CEO Pay

Tracy Staton — Mon, 19 May 2008 14:49:55 -0400

Daniel Vasella- Novartis

Total Compensation: $15.5M

2006 Revenue: $38.1B
2007 Revenue: $39.8B
Change: 4.46%

Details: Vasella earned 17 million Swiss francs, or about $15.5M in 2007. That's down from 21 million francs in 2006, or $17.5 million -- a figure that some say places him among the highest-paid executives in Europe.

Novartis News:
Vasella touts Novartis' diversification
CEO: Novartis plans big restructuring
Cash-rich Novartis CEO mulls biotech buyouts

Vasella touts Novartis' diversification

Mon, 14 Apr 2008 06:59:55 -0400

Novartis CEO Daniel Vasella (photo) talked up his company's prospects in an interview with the Swiss weekly Sonntag, saying that it's well on its way to returning to dynamic growth.

Vasella acknowledged that the pharma biz remains difficult, but he praised Novartis' pipeline and cited the new Alcon deal as evidence that the company will be strengthening itself through diversification. Last week, Novartis agreed to buy 25 percent of the eye care company for $11 billion and another big chunk by 2010 for $28 billion, giving it 72 percent controlling interest in the U.S.-based Alcon.

Meanwhile, Alcon announced that it's planning to build a manufacturing facility in Singapore as a beachhead for Asian distribution of its pharmaceutical products. The company plans to break ground in 2009 and have the plant fully operational by 2012.

- find the story in Forbes
- see the Singapore coverage, also in Forbes

ALSO: A new study shows that Novartis' Reclast/Aclasta bone drug outperformed Sanofi-Aventis' Actonel at increasing bone mass in patients whose osteoporosis was caused by steroids. Release | Report

Related Articles:
Novartis taps new U.S. pharma chief. Novartis report
Novartis discovery chief departs in shakeup. Novartis report
CEO: Novartis plans big restructuring. Novartis report
Novartis pledges $39B for Alcon. Novartis report
Cash-rich Novartis CEO mulls biotech buyouts. Report

What did Vasella see in Alcon?

Wed, 09 Apr 2008 06:59:55 -0400

Just why would Novartis pay $11 billion for one-fourth of an eye-care company and promise another $28 billion for another big chunk? The Wall Street Journal asked CEO Daniel Vasella (photo) just that. You've heard some of the reasons Novartis wanted Alcon: aging population, meaning more people with eye-care needs; and diversification. Here's another: The lack of pricing pressure on eye products. While insurers and government healthcare systems are twisting drugmakers' arms for pharma discounts, consumers typically are paying for the kind of eye-care products Alcon sells. "You can pass on price increases easier," Vasella said. "As soon as you get into regulated markets like pharma, it's more difficult."

And there lies the rub for much of the drug industry right now. Vasella predicts that pharma prices on the whole will decline--unless and until R&D innovation declines. "[T]hen society will have to make a decision: Do we want innovation or not?" he says.

- find more from Vasella in the WSJ
- check out an excerpt from that interview at Pharmalot

Related Articles:
Novartis: No more deals, no Roche sale.
Novartis pledges $39B for Alcon
Alcon faces setback on experimental AMD therapy
Cash-rich Novartis CEO mulls biotech buyouts
CEO: Novartis plans big restructuring

SPOTLIGHT: Novartis: No more deals, no Roche sale

Tue, 08 Apr 2008 06:59:52 -0400

Two questions raised by yesterday's Novartis-Alcon announcement. Is the Swiss drug maker in the market for more deals? And might Novartis offload its one-third stake in Roche to pay for Alcon or some other acquisition. CEO Daniel Vasella (photo) answers both: No. Report | Report

Novartis pledges $39B for Alcon

Mon, 07 Apr 2008 06:59:58 -0400

In a bid to diversify its business away from traditional pharma, Novartis has bought a 25 percent stake in Alcon and is eyeing the purchase of another 52 percent in 2010. The Swiss drugmaker paid $11 billion for this first chunk of the Texas-based eye care business and has an option to buy the rest for $28 billion more.

CEO Daniel Vasella (photo) called Alcon an "excellent" strategic fit with Novartis, which makes contact lenses and ophthalmic drugs. The deal furthers his strategy of drilling into high-growth areas of the market, he said. "Eye care will continue to grow dynamically as there is a growing unmet medical need driven primarily by the world's aging population." Alcon makes eye drops, contact lens solutions, surgical equipment, and implantable lenses.

Analysts, however, said the deal wasn't a bargain and that it wouldn't deliver much to Novartis's bottom line, at least initially. It's a good strategic fit, a Landsbanki Kepler analyst told the Financial Times, "but they won't be able to reap much in synergies right away because they're only buying a minority stake." Meanwhile, Standard & Poor's lowered its long-term credit rating on Novartis because the company said it would go into debt to finance the second chunk of its Alcon purchase.

- see the Novartis press release
- read the article in the FT
- check out the ratings news at Orange
- get MSNBC's take
- find the coverage in Forbes

Related Articles:
Alcon faces setback on experimental AMD therapy. Report
Cash-rich Novartis CEO mulls biotech buyouts. Report
Novartis plots 2,500 more job cuts. Report
CEO: Novartis plans big restructuring. Report

SPOTLIGHT: Vasella defends dual role at Novartis

Tue, 26 Feb 2008 06:59:52 -0500

Novartis Chairman and CEO Daniel Vasella (photo) got a bit defensive at his company's annual meeting yesterday. Questioned about his pulling double duty as chairman and CEO, Vasella countered that firms with one person in each slot spend too much time and money settling conflicts between the two. Report

Novartis CEO's statin? Pfizer's Lipitor

Thu, 03 Jan 2008 06:59:58 -0500

What's a pharma CEO with high cholesterol to do? Take his company's statin, of course. But Novartis chief Daniel Vasella (photo) eschews Lescol in favor of... Pfizer's Lipitor. Vasella tried Lescol. Twice. But side effects pushed him off the drug and onto Lipitor.

As the Wall Street Journal's Health Blog notes, Vasella's experience is just one of the many times Lescol has lost out. Viewed as less potent than other statins, Lescol totes up global sales of less than $1 billion, compared with $10 billion for Lipitor. And both now are losing out to Zocor imitators.

- check out the item from the Health Blog

Related Articles:
Sleep study could boost some statins. Report
Switching to generic statins not so healthy. Report

Novartis plots 2,500 more job cuts

Thu, 13 Dec 2007 06:59:57 -0500

CEO Daniel Vasella (photo) gave us the broad outline two days ago. Now here are the details: Novartis is slashing its payroll by 2,500 jobs, or 2.5 percent of its worldwide workforce. The cutbacks are designed to save $1.6 billion in annual costs by 2010; Novartis will take a $450 million charge to pay for the program. In October, the company announced it would cut 1,250 jobs, mostly in the U.S. These new cuts come on top of those, bringing the grand total to 3,750 jobs.

The litany of Novartis' woes is familiar to anyone in pharma these days. The company has new generic competition for three of its big drugs. It's been stymied in getting new drugs to market; witness Galvus, which has been delayed because of safety concerns. Another blow was the withdrawal of its bowel drug Zelnorm earlier this year.

This less-than-stellar news has depressed Novartis stock by 8.8 percent this year. But the market likes the cutback plan: Shares were up 1.6 percent this morning.

- check out the release on the layoffs
- read this BBC report
- take a look at the article from Dow Jones

Related Articles:
CEO: Novartis plans big restructuring. Report
Top 5 layoffs of 2007 (Updated). Report
Lagging sales spur Novartis layoffs. Report
Novartis makes the "Biggest Splash". Report
Novartis bankrolls a drug manufacturing revolution. Report

CEO: Novartis plans big restructuring

Tue, 11 Dec 2007 06:59:58 -0500

On second thought, let's restructure the whole company: In October, Novartis announced some job cuts and management changes. Now, CEO Daniel Vasella (photo) says he's working on a sweeping overhaul of his company's org chart. He's not ready to disclose details, but he did tell the Wall Street Journal that he wants to remove several layers of management so that employees can make decisions more quickly.

Vasella says Novartis needs to become less bureaucratic to handle the drug industry's many challenges, which we probably don't need to name here, but will anyway: generic competition, cautious regulators, cost-conscious payers.

This second round of restructuring will involve more job cuts, Vasella says, but he didn't specify how many. More details on the plan are forthcoming by mid-December, with further info coming in February.

- read the report from the Wall Street Journal

UPDATE: Novartis announced on December 12 that it would cut 2,500 jobs. Report

ALSO: Take a look at Novartis' pipeline. Report

Wyeth CEO: FDA creating monopoly meds

Mon, 05 Nov 2007 06:59:55 -0500

U.S. drug regulators aren't playing fair, says outgoing Wyeth CEO Bob Essner. New meds that should be allowed on the market--because they're safe and effective--are blocked if they're not demonstrably better than existing products. That effectively hands monopoly status to the first company to market with a given type of drug, Essner says.

Essner is echoing concerns raised by Novartis CEO Daniel Vasella (photo), who questioned the FDA's right to ask whether new drugs are better than those already being sold. Both companies suffered painful denials recently, Wyeth for bifeprunox, a schizophrenia treatment, and Novartis for Prexige, a painkiller.

- check out the report from the Financial Times
- read this interview for more

Related Articles:
New drug approval lags in 2007. Report
FDA quick to reject drugs as it gets more cautious. Report
Industry exec says FDA approval process too strict. Report

FDA rejects embattled Novartis drug

Thu, 27 Sep 2007 06:59:55 -0400

Is expected bad news better than unexpected bad? Ask Novartis. Today the company announced the FDA's rejection of the Cox-2 painkiller Prexige--a thumbs-down that CEO Daniel Vasella predicted last week. But it might not be the agency's final word.

Prexige, of course, was banned in Australia last month, after reports of severe liver-related side effects--including two deaths. Now, the company says it won't give up on the drug; the FDA is open to exploring the use of Prexige in people who might benefit most, such as ulcer patients who can't take other pain remedies.

Meanwhile, apparently looking for ways to wipe Prexige's slate clean, Novartis has asked the FDA for another approval--to change the drug's brand name.

- see this press release from Novartis
- read more from Swiss Info

Related Articles:
Australia bans Novartis' Prexige. Report
Novartis CEO Vasella doubtful of Prexige approval. Report
UK doctors warned over Novartis' Prexige. Report

Novartis CEO mum on Bayer buyout

Mon, 17 Sep 2007 06:59:55 -0400

Novartis says it's not interested in merging with another Big Pharma player--but CEO Daniel Vasella (photo) still won't comment on a rumored takeover of German rival Bayer.

Vasella told a French newspaper that a merger isn't the answer to the company's skyrocketing R&D costs and less-than-skyrocketing revenues. But when asked point-blank about Bayer, he clammed up. Some stock analysts have pooh-poohed the notion of Novartis snapping up Bayer. Others, however, helped fuel the rumors, which have died down a bit lately. Vasella's "no comment" just may stir them up again.

- read the coverage from Forbes

Related Articles:
Rumor Mill: Novartis may bid for Bayer. Report
Cash-rich Novartis CEO mulls biotech buyouts. Report
Bayer plans to beef up biotech pipeline. Report
Novartis CEO critiques U.S. healthcare. Report

SPOTLIGHT: Vasella doubtful of Prexige approval

Thu, 13 Sep 2007 06:59:52 -0400

The FDA probably won't approve the Novartis painkiller Prexige now that it's faced regulatory action in other countries, according to CEO Daniel Vasella. Report

ALSO NOTED: Aventis settles fraud claims; Novartis CEO critiques U.S. healthcare;

Mon, 10 Sep 2007 06:59:50 -0400

> Aventis Pharmaceuticals will pay $190 million to settle claims of drug-pricing fraud. The payment will be divided among the federal government and several states. Report

> Bayer is taking over the California plant that produces its Betaseron multiple sclerosis drug. The facility had been operated by Chiron. Report

> A private equity firm focused on healthcare has wooed away a Johnson & Johnson group chairman. In joining Water Street Healthcare Partners as operating partner, Curt Selquist will become another in a veritable cornicopia of ex-healthcare execs at the firm. Release

> Mylan Pharmaceuticals got tentative FDA approval for its formulation of Topiramate, a generic version of Ortho McNeil's Topamax drug. Release

And Finally... In a New York Times Q&A, Novartis CEO Daniel Vasella critiqued the U.S. healthcare system and assessed his own industry. One highlight: He blamed the high cost of new drugs in part on an overcautious FDA. Article