Novartis CEO to Step Down In January -- 2nd Update
September 04 2017 - 4:31AM
Dow Jones News
By Denise Roland
Novartis AG said its Chief Executive Joe Jimenez is to step down
in January after leading the Swiss pharmaceutical giant through a
tumultuous eight years marked by big patent expiries and
intensifying scrutiny on drug pricing in the U.S.
He will be replaced by Vas Narasimhan, who is currently global
head of drug development at the company.
Mr. Jimenez, 57 years old, joined the company in 2007 and became
its CEO in 2010. He will remain available to Novartis in an
advisory capacity until the end of August next year, when he will
retire, the company said.
He presided over the patent expirations Diovan for hypertension
and cancer drug Gleevec, both of which generated several billion
dollars annually at peak. When a drug patent expires, cheaper
copycats can enter the market, sharply eroding sales.
To replace that lost revenue, Mr. Jimenez bet on a series of
would-be blockbusters which have met with mixed success.
Cosentyx, for certain rheumatological conditions and psoriasis,
generated annual revenue of $1.1 billion last year, having launched
in 2015.
But Mr. Jimenez's other big bet, Entresto for heart failure, was
met with resistance from doctors reluctant to switch patients onto
a new drug, as well as reimbursement barriers from insurers. That
is changing as doctors gain more experience with Entresto and
insurers gradually adopt more permissive policies, but those
initial hurdles have hampered the drug's growth. Although Novartis
launched Entresto shortly after Cosentyx, the heart drug's 2016
revenue came to just $170 million.
Novartis Chairman Joerg Reinhardt credited Mr. Jimenez with
rejuvenating the company's drug pipeline and navigating the patent
expirations of the company's two largest products.
"We anticipate a smooth transition as Joe built a strong
leadership team and mentored his successor," he said. The board
considered both internal and external candidates for the role, he
told reporters.
Mr. Jimenez said Novartis was on a "strong path to the future"
and that it was the "right moment" to hand over the reins to Dr.
Narasimhan.
"I have been pretty public about the fact that a CEO should not
stay much longer" than eight years, he told reporters. "You come
in, see what you want to change, and change it."
Novartis is in the midst of a strategic review on the future of
its struggling eyecare unit, Alcon. Mr. Jimenez told reporters he
planned to complete that review by the end of the year, before he
steps down.
Dr. Narasimhan, 41 years old, trained in medicine and joined
Novartis in 2005 from management consultancy McKinsey & Co.
Mr. Reinhardt said Dr. Narasimhan's medical background combined
with his "significant experience managing the interfaces between
research and development and commercial units" made him the right
choice to succeed Mr. Jimenez.
Dr. Narasimhan told reporters it was too soon for him to comment
on the next phase of the company.
Mr. Jimenez said he planned to move back to California, where he
is from, with an eye to taking up a role in Silicon Valley. "It's
too early to say [what I will do next], but I've always been
incredibly interested in the intersection between biology and
technology," he told reporters.
Write to Denise Roland at Denise.Roland@wsj.com
(END) Dow Jones Newswires
September 04, 2017 04:16 ET (08:16 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Novartis (NYSE:NVS)
Historical Stock Chart
From Apr 2024 to May 2024
Novartis (NYSE:NVS)
Historical Stock Chart
From May 2023 to May 2024