Novartis AG to Dissolve Cell and Gene Therapy Unit, Move Affects 400 Staffers

Published: Sep 02, 2016

Novartis AG to Dissolve Cell and Gene Therapy Unit, Move Affects 400 Staffers August 31, 2016 (Last Updated: 12:20pm PT)
By Alex Keown, BioSpace.com Breaking News Staff

BASEL, Switzerland -- Novartis AG is dissolving its Cell and Gene Therapy Unit, according to Endpoints News, citing a note sent to 400 employees by division president Usman Azam.

“The risk of embarking on a new adventure in uncharted territory is that things don’t always work out as envisioned. Today, I have the unfortunate task of announcing that we are dissolving the Cell and Gene Therapies Unit,” Azam said in the note, according to Endpoints.

As a result, most of the employees in the division should be shifted to other divisions, but about 120 may be handed pink slips. Shares of Novartis are slightly down this morning, although the news of the unit’s dissolving may prompt further drops.

The disbanding of the unit is staggering, considering the number of companies dedicated to various forms of gene therapy, including the white hot area of reengineering the body’s T cells to attack cancer cells. However, that doesn’t mean the company is disbanding the work that is being done in the CAR-T field. A Novartis spokesperson told Endpoints that the work done in the Cell and Gene Therapies Unit will be reintegrated into “the larger Novartis organization, as part of a natural evolution of our internal organizational design.”

Karine Kleinhaus, North American vice president of Pluristem Therapeutics , said Novartis’ move was not surprising and is a model that many of the big pharma companies are shifting towards.

“Today’s news on Novartis is really a pattern seen with other bigger pharmaceuticals companies such as Pfizer . Big pharma has found that focusing on licensing deals with smaller, focused biotechnology companies is the better route as these biotechs have focused their businesses, making them nimble and able to deal effectively with every aspect of the discovery and development of new therapies, including the complex manufacturing needed to produce highly sensitive biologics,” Kleinhaus said in a statement to BioSpace. “With big pharma cutting down on R&D teams, smaller mid and late-stage firms like Pluristem, can step in with completed early R&D and commercial-grade manufacturing, as well as late-stage clinical trials that are under way.”

Novartis had seen great success in the field, particularly with its investigational leukemia treatment CTL019. In late 2015, the company reported mid-stage trial results that the treatment wiped out the blood cancer in 93 percent of patients. CTL019 is a chimeric antigen receptor T cell (CAR-T) therapy for the treatment of children with relapsed/refractory acute lymphoblastic leukemia. The company plans to file with the U.S. Food and Drug Administration and the European Medicines Agency for regulatory approval in 2017.

CAR-T therapy is being pursued by a number of companies in addition to Novartis. Two leading companies include Juno Therapeutics and Kite Pharma , which recently opened its 43,500-square-foot CAR T cell therapy manufacturing facility that is expected to churn out therapeutic products for up to 5,000 patients annually. The new facility will be able to begin producing Kite’s lead CAR T-cell product candidate, KTE-C19, upon regulatory approval. KTE-C19 is currently in a mid-stage study for the treatment of chemorefractory diffuse large B-cell lymphoma (DLBCL). Kite anticipates commercial launch of KTE-C19 in 2017. TE-C19 has had some negative press after the death of a patient, but Kite said it was determined the experimental medication had no role in the death of a patient with a low prognosis.

Juno recently took a tumble in its own CAR-T pursuits, following the death of three patients during the mid-stage trial of JCARO15, a CAR-T therapy for patients with relapsed or refractory B cell acute lymphoblastic leukemia. The company is currently facing a class action lawsuit that alleges the company violated federal securities law by not informing investors of the deaths.

Novartis’ decision to eliminate the Cell and Gene Therapy division is in line with the company’s integrated development model, which includes three focused, customer-facing divisions. The divisions will be Innovative Medicines (formerly the Novartis Pharmaceuticals division), which will include the Novartis Pharmaceuticals and Novartis Oncology business units; Sandoz, the generics and biosimilar division, which includes the Retail Generics, Anti-Infectives and Biopharmaceuticals franchises; and Alcon , the eye care devices division, which includes the Surgical and Vision Care franchises. The divisions will be supported by Novartis Institutes for BioMedical Research, Global Drug Development and Novartis Operations, which includes Technical Operations and Novartis Business Services.

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