Novartis reshuffling doesn't portend a pullback from gene therapy, company says

Two months ago, Novartis Gene Therapies chief Dave Lennon left the company to lead a biotech startup that is operating in stealth mode. It was with similar stealth that the unit Lennon formerly headed up fell victim to a reorganization by the company.

In a move that was effective in February, Novartis Gene Therapies was broken up and integrated into the company, costing nearly 150 employees their jobs, Endpoints reported on Tuesday. A spokesperson for Novartis confirmed the report in a statement emailed to Fierce Pharma. Remaining employees from the gene therapy unit now report to Novartis’ respective organizational units, including pharmaceuticals, technical operations, global drug development and biomedical research.

“This transition does not reflect a change in strategy,” the Novartis spokesperson said in the statement. “Gene therapies and advanced platforms will play an increasingly important role in the years and decades to come.”

RELATED: With new AveXis name, Novartis spotlights marquee role for gene therapy business

But the move could raise questions about Novartis' future gene therapy ambitions. Three years ago, when the company paid $8.7 billion to acquire AveXis and its prized drug candidate, Zolgensma, Novartis positioned itself as a frontrunner in that burgeoning field. Executives put AveXis president Lennon in charge of the new gene therapy unit, and the company went all-in on manufacturing, buying a Colorado plant from AstraZeneca and pouring $115 million into a new site in Durham, North Carolina.

While Zolgensma was approved in short order for spinal muscular atrophy and has become the world’s most widely-used gene therapy, it has not become the blockbuster that Novartis anticipated. Priced at $2 million-plus, the one-and-done treatment is the world’s most expensive drug. It has been used to treat more than 1,400 infants and children with the disorder, the company said.

The Novartis-AveXis relationship soured quickly when it was revealed that some data from a mouse trial presented to the FDA in support of Zolgensma’s approval was manipulated. Novartis fired two former AveXis execs over the debacle and eventually changed the name of the unit to Novartis Gene Therapies.

RELATED: Novartis is shutting down Colorado plant, laying off 400 employees after overestimating gene therapy demand

Earlier this year, Novartis shut down its plant in Longmont, Colorado, laying off approximately 400 employees. 

Despite the changes, Novartis said it remains committed to gene therapy. The new structure will support the “continued growth of Zolgensma and the development of other gene therapies in a rapidly evolving environment,” the Novartis spokesperson said, adding that the company will continue to “invest significantly” in gene therapy.