Novartis to integrate business units, save ~$1B by 2024; appoints chief medical officer
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Novartis (NYSE:NVS) said it was integrating its pharmaceuticals and oncology business units to create two separate organizations, Innovative Medicines US and Innovative Medicines International, targeting saving of at least $1B by 2024.
The Swiss pharma giant said the establishment of an independent U.S. commercial organization strengthens Novartis’s ability to achieve its goal of becoming a top-five company in the U.S. in terms of sales.
“With our portfolio of in-market medicines and up to 20 major pipeline assets that could be approved by 2026, Novartis is in a strong position to deliver above-peer-median sales and margin growth in the mid- and long-term,” said Novartis CEO Vas Narasimhan.
The two units will have full P&L responsibility across all therapeutic areas.
Marie-France Tschudin, currently president, Novartis Pharmaceuticals, will become president, Innovative Medicines International and CCO.
Victor Bulto, currently Head of US Pharmaceuticals, will become president, Innovative Medicines US. They both will report to Novartis Narasimhan, effective immediately.
Novartis added that it will create a new Strategy & Growth function combining corporate strategy, R&D portfolio strategy and business development aimed at looking for internal and external opportunities to strengthen the company’s pipeline.
In the interim, the function will be led by Lutz Hegemann, president, Global Health, until a new leader is found.
Novartis said it will also combine its Technical Operations and Customer & Technology Solutions units to create a new Operations unit.
Steffen Lang, currently Global Head of Novartis Technical Operations, will become president, Operations reporting to Narasimhan.
In addition, all G&A functions — finance, people & organization, ethics, risk & compliance, legal, and communications & engagement—will be integrated on global and country levels.
Novartis noted that SG&A savings of at least $1B to be fully embedded by 2024 as a result of these changes.
Meanwhile, Novartis (NVS) added that Shreeram Aradhye was appointed president, Global Drug Development and chief medical officer, effective May 16.
Aradhye is returning to Novartis and recently served as executive vice president and chief medical officer at Dicerna Therapeutics.
The company added that Susanne Schaffert, president, Novartis Oncology, Robert Schaffert, president, Customer & Technology Solutions and John Tsai, president, Global Drug Development and chief medical officer are leaving Novartis.