Novartis Says Drug-Unit Chief To Leave Firm -- WSJ
18 May 2016 - 5:03PM
Dow Jones News
By Denise Roland
Novartis AG said its head of pharmaceuticals, David Epstein, is
to leave the company amid a restructuring that will split his role
in two.
The Basel, Switzerland-based drug giant said Mr. Epstein, who is
American, had decided to leave the company "to explore new
challenges from the U.S." Chief Executive Joe Jimenez said Mr.
Epstein had "steered our pharmaceuticals division through a period
of excellence in innovation, execution and improved financial
results."
Novartis disclosed Mr. Epstein's departure as the company
announced plans to separate its cancer unit from the rest of the
pharmaceuticals business.
Bruno Strigini, who already leads the oncology business, will
report directly to Mr. Jimenez as of July 1. The rest of the
pharmaceuticals business, which sells treatments for ailments from
heart failure to multiple sclerosis, will be led by Paul Hudson,
currently AstraZeneca PLC's head of North America. All changes are
effective from July 1.
The reorganization comes as Novartis battles falling sales of
blockbuster cancer drug Gleevec, which lost exclusivity earlier
this year. One of the recently launched drugs it is depending on to
help replace that lost revenue, Entresto for heart failure, has had
a disappointing start due to doctors' hesitation to switch stable
patients onto a new medicine and delays in securing reimbursement
from health insurers in the U.S.
It also closely follows a restructuring of eye-care unit Alcon,
which is struggling amid increased competition in the lens-implant
market and the entry of cheaper copycats of some ophthalmic drugs.
That move, announced in January, shifted Alcon's drugs into the
pharmaceuticals division, leaving behind surgical equipment and
vision-care products, such as contact lenses. It also involved the
departure of Jeff George as CEO of that division.
The company said the restructuring reflected the importance of
the oncology business following the integration of the cancer drugs
Novartis acquired from GlaxoSmithKline PLC following a $20 billion
asset-swap deal between the two companies. That deal, which closed
in the first quarter of 2015, involved Novartis trading its
vaccines for Glaxo's cancer franchise.
A Novartis spokesman said the cancer business was around the
same size as the rest of the pharmaceuticals division combined but
operated on a different business model. He added that the
restructuring would simplify decision-making at that unit.
Novartis's most prominent research program is for a cutting-edge
approach involving the re-engineering of patients' immune cells to
make them more powerful at fighting cancer. The company is aiming
to win regulatory approval for the approach in the U.S. by
2017.
Novartis shares, which have lost 23% of their value over the
past 12 months, slid 9 cents to $75.54 in afternoon trading in New
York.
--Anne Steele contributed to this article.
Write to Denise Roland at denise.roland@wsj.com
(END) Dow Jones Newswires
May 18, 2016 02:48 ET (06:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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