As the dust settles on Novartis’ results, analysts have expressed their disappointment and fear that the Swiss major is struggling to get drugs to market while looking at changes at the top of its pharmaceuticals division.
As reported by PharmaTimes World News yesterday, the Basel-based group is cutting 1,260 jobs in the USA but the firm also announced that Thomas Ebeling is being replaced as head of pharmaceuticals by Joe Jimenez, who joined Novartis in April. Mr Ebeling will now take charge of the consumer health division.
The company said that the changes have been made to “expand experience at the top management level and to provide fresh impetus”, noting that Mr Jimenez will take over responsibility of “transforming pharmaceuticals as the business adapts to new market conditions”. However how well Novartis is adapting to those changes is now being questioned.
Navid Malik at Collins Stewart said that he was particularly worried by the delays Novartis is struggling to get key drugs to market including delays in the USA for its experimental diabetes drug, Galvus (vildagliptin) and the new-generation COX-2 inhibitor Prexige (lumiracoxib) for osteoarthritis, plus the withdrawal of Zelnorm (tegaserod maleate) for irritable bowel syndrome. He added that given the concerns being expressed by Galvus at the US Food and Drug Administration and the fact that Tekturna (aliskiren) for the treatment of high blood pressure took longer than anticipated to reach the market, “we do not hold a high degree of confidence that Novartis can deliver successfully from its pipeline”.
Mr Malik concluded by saying that as with the purchase of Chiron, last year, pressure may mount for Novartis to look at big deals to help push through growth in its pharmaceutical division, “which has become the poor cousin compared to other divisions in the company”. The company's chief financial officer, Raymond Breu, said that the drugmaker currently has "no large acquisitions on the horizon," but said that it is keeping its options open.