Novartis CEO (sort of) admits mishandling Zolgensma crisis

Novartis CEO Vas Narasimhan 2019
Novartis could have handled the Zolgensma crisis better, CEO Vas Narasimhan told thousands of managers during an internal call. (Novartis)

Until recently, Novartis CEO Vas Narasimhan apparently navigated several scandals unscathed, at least personally. But the Zolgensma data manipulation debacle could be the first big, public mistake of his own making.

Addressing 12,000 managers in a not-quite mea culpa—as he did in the wake of the $1.2 million Michael Cohen contract exposé—Narasimhan said he now sees where Novartis could have done a better job handling the Zolgensma crisis, Swiss newspaper Schweiz am Wochenende reported, according to Bloomberg.

The words came in stark contrast to his “we did the best we could” comment in a call with analysts right after the news erupted. Now, he said he’s not perfect as a CEO, and “we will all keep working on it.”

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Novartis and its AveXis unit took heavy fire earlier this month when the FDA announced faked mouse data were included in the application package for the company's gene therapy Zolgensma. What’s worse for the company’s image, Novartis heard about the problem in mid-March and confirmed the allegations internally in early May, but waited weeks before alerting the FDA. By the time Novartis told the agency, it had been more than a month since the pricey spinal muscular atrophy therapy was approved.

Narasimhan has rejected the idea that the delay had anything to do with the FDA's review timeline. Novartis was only trying to make sure it gave the FDA a clear picture of the problem, he said. But the company did replace AveXis' two top scientists in a purge of employees involved in the data irregularities.

RELATED: Novartis' AveXis shifted top scientific leadership before Zolgensma data scandal erupted

Just as the company works to appease the public uproar, a new revelation has raised eyebrows. A C-level exec sold CHF 925,400 ($944,300) worth of the company’s stock July 19, a filing to the Swiss exchange shows. That's the day after Novartis unveiled its second-quarter financial results and almost three weeks after the company informed the FDA of the data falsification—but before the Zolgensma problem became public.

A spokesperson told FiercePharma: “As is usual in such cases, the transaction was thoroughly checked beforehand and then approved accordingly. The person in question was not in possession of relevant material information.”

While the data breach might not affect Zolgensma’s approval—the FDA has said the key human clinical data were intact—the agency did say it was considering criminal and civil penalties against the company. It referred the case to the Office of Criminal Investigations for evaluation, The Wall Street Journal reported, citing one person familiar with the matter.

RELATED: Senate panel launches probe into Novartis' 'reprehensible' response to Zolgensma data irregularities

The furor in Washington is also pronounced. A team of five U.S. lawmakers, including Sens. Bernie Sanders and Elizabeth Warren, blasted Novartis for the data manipulation and failure to quickly reveal it to the FDA. Senate Finance Committee chair Chuck Grassley, calling Novartis’ conduct “reprehensible,” has launched an investigation. He demands a detailed timeline of the development and all records relating to its in-house inquiry.

The Novartis spokesperson confirmed the company has received the letter and is planning to respond.

Wednesday, AveXis said its former chief scientific officer, Brian Kaspar, and his brother, Allan Kaspar, then-senior vice president of R&D, stopped working at the company in early May when the internal probe first confirmed the data falsification. The two scientists were replaced by Page Bouchard on Aug. 5, AveXis said.

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