Six months after announcing a series of deals aimed at refocusing its R&D efforts, Novartis ($NVS) is starting to provide some glimpses of what the new company will look like--and who will and will not be leading it.
Novartis confirmed today that in the first half of next year, it expects to close the three transactions it announced on April 22--the sale of its animal health unit to Eli Lilly ($LLY) for $5.4 billion, the sale of most of its vaccines to GlaxoSmithKline ($GSK) for $7.1 billion and the formation of a joint venture with GSK to market over-the-counter products. In a press release, the company said that George Gunn, the division head of Novartis Animal Health, will retire upon the closing of the Lilly deal, and Andrin Oswald, who helmed Novartis Vaccines, will be leaving "to pursue other opportunities."
One top exec is staying: Brian McNamara, division head for Novartis OTC, who will become head of the Americas and Europe for the newly formed joint venture, called GSK Consumer Healthcare. Simultaneous to McNamara's appointment, GSK filed a notice to the Bombay Stock Exchange announcing that the company was promoting one of its senior executives in India, Zubair Ahmed, to head up the Asia Pacific, Middle East and Africa regions for the new OTC division, according to The Financial Express.
Novartis CEO Joe Jimenez has long confessed to being a big fan of consumer health products, and the JV with Glaxo is designed to maintain the company's presence in that industry while at the same time freeing up resources to concentrate on more profitable endeavors, such as developing cancer drugs. Novartis contributed $3.5 billion in assets to the new consumer joint venture, while Glaxo put in $6.5 billion. GSK has a 63.5% stake in the JV, leaving it with managerial control.
The folks charged with managing GSK Consumer Healthcare have some big brands to back them up in a competitive market, including Excedrin, Panadol and Theraflu. But that doesn't mean consumer health will continue to be a walk in the park for GSK. In July, GSK CEO Andrew Witty--who has embarked on a slimming-down campaign for his company much like Jimenez has done at Novartis--acknowledged that spinning off the consumer health division may ultimately be the best path forward.
As for Novartis, it's continuing its bid to bulk up in oncology as it pulls away from vaccines and other slower-growing endeavors. Earlier this week, Novartis said it is designing new studies of two of its experimental cancer drugs and its newly approved ALK inhibitor Zykadia, all of which will be tested in combination with Bristol-Myers Squibb's ($BMY) PD-1 drug Opdivo (nivolumab). And over the summer, Novartis' personalized CAR-T cancer therapy development program won the FDA's coveted "breakthrough" designation.
- here's the release from Novartis
- read more at The Financial Express