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Novartis sets sights on high-value medicines and US market

Since Vas Narasimhan took over the helm of Novartis, the company has been undergoing a major restructuring to focus on high-value medicines. © Keystone / Patrick Straub

Swiss pharma giant Novartis has unveiled an updated strategy focused on high-value medicines and boosting its position in the US market. It also confirmed that its generics unit Sandoz would be spun off by the end of 2023.

During the annual investor day meeting in Basel, Novartis outlined its plan to become what it calls a “pure-play” innovative medicines company after the Sandoz spin-off operation is complete. After a strategic review, Novartis announced in August that it plans to spin off the generics and biosimilars division, which reaped $9.8 billion (CHF9.4 billion) in worldwide sales last year, but  has seen revenue decline in its key market in the US. 

Novartis will focus on five disease areas, key technology platforms like cell and gene therapies, and eight brands that it believes have multi-billion-dollar sales potential. Among these are Zolgensma, a $2.1 million gene therapy for spinal muscular atrophy, and Scemblix (asciminib), which was recently approved by US regulators for chronic myeloid leukemia.



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The focus on key brands is also intended to help the company boost sales in the US market. In a statement, the company said that it is taking a ‘US-first’ mindset with the aim to “improve competitive positioning” and “become a top-five player in the US by 2027”. Novartis has lagged behind US-based companies such as Pfizer and Johnson & Johnson, ranking tenth in terms of sales in the US market. It also seeks to improve its position in the Chinese market from fifth to third.

This focus on specific high-value brands and the US market, said CEO Vas Narasimhan, is part of an aim to “increase value per new molecular entity” from the company’s pipeline. By 2027, the company expects to achieve average annual sales growth of 4%.

Since Narasimhan took over the CEO post in 2018, Novartis has been shedding parts of its business. It sold its consumer healthcare unit to GSK and spun off its eyecare division Alcon into a separate entity in 2019. 

In April Novartis announced a major restructuring to focus on “innovative medicines” – combining its pharmaceutical and oncology divisions. This led the company to shed 7% of its workforce globally. In Switzerland, it said it would cut 10% of its workforce, which means 1,400 jobs will disappear, many of which are in management positions. 

In August, the company said it planned to sell off the Sandoz generics unit, which is the last name of the pre-Novartis era, which goes back more than 100 years to the chemical dye industry in Basel. On Thursday, the company confirmed that Sandoz will be spun off by the end of 2023.


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