Novartis AG CEO, a San Francisco Native, Takes an Axe to Predecessor's Empire
March 25, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Joe Jimenez, chief executive officer of Basel, Switzerland’s Novartis AG , has been noted recently for a high-tech blend of digital tech and biotech as he slips out from the shadow of his predecessor, Daniel Vasella.
Novartis has most recently been in the news for repeated layoffs in the U.S. and Puerto Rico as the company undergoes a major restructuring. In April 2014 Novartis inked a deal with Indianapolis-based Eli Lilly and Company in which Lilly bought Novartis Animal Health for about $5.4 billion.
The same month, Novartis and UK-based GlaxoSmithKline agreed to create a new consumer health business. Novartis bought GSK’s oncology product lines for $14.5 billion, with an additional $1.5 billion rolling in upon meeting various milestones. GSK bought Novartis’s vaccines business for $7.1 billion, except the flu component of the vaccines division.
Jimenez is apparently preparing Novartis for the loss of four out of 10 patents for the company’s products that will expire in upcoming years. “Our view has to be based on how health care is going to change,” Jimenez said in a statement. “If you look at what led to the transformation that we just went through, it was a view of what’s going to happen in 10 years externally.”
In addition to the big asset swap with GSK and Lilly, Jimenez is pushing the company into a new world of digital-based medicine, with diagnostic tests that utilize Microsoft’s Kinect, best known for use with Microsoft’s Xbox gaming system and Google Inc. contact lenses that are designed to detect blood sugar levels from tears.
On Jan. 12, 2015, Novartis announced the creation of a joint investment company with Qualcomm Ventures. The investment firm will use $100 million to support early-stage companies that merge digital technology with life sciences.
“By working with Qualcomm Ventures, Novartis sees the opportunity to take a greater leadership role in introducing new mobile or digital technologies that have the potential to change the practice of medicine and bring more breakthroughs with real benefits to patients and society,” said David Epstein, division head of Novartis Pharmaceuticals in a statement.
“We are excited by the potential of digital medicines to further enhance our mission of the right drug for the right patient at the right time helping people live longer with a better quality of life giving more time to do the things that matter to them.”
Built by Vasella, Novartis was noted for a variety of acquisitions and a few blockbuster drugs such as Gleevec. Gleevec, a treatment for leukemia, raked in $4.7 billion in sales in 2014, but its patent expires in February 2016. It has been noted that while Vasella was still chairman of the company, Jimenez, who stepped in as chief executive in February 2010, his approach was relatively conservative and consistent with Vasella’s history. Shortly after Vasella was replaced by Joerg Reinhardt in August 2013, Jimenez instigated the deals with GSK and Eli Lilly.
Jimenez’s approach has a mixed receiption. “Jimenez is finally stepping out from Vasella’s shadow,” said Birgit Kulhoff, an analyst with Rahn & Bodmer Co. in Zurich in a statement, but thinks that the $16 billion paid for GSK’s cancer drugs was “crazy.”
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