Novartis’ Sandoz business is broken, CEO says, but he’s focused on fixing it
May 16, 2018
Novartis CEO Vas Narasimhan conceded to investors today that the company does not yet have a good fix on how to make sure its Sandoz unit is a leader in the coming years.
In Europe, where biosimilars and branded generics are popular, Sandoz is doing just fine. But he said in the U.S., where generic pill prices have cratered and biosimilar uptake has been limited, Sandoz is struggling.
“We don’t have the answer yet on how to ensure that Sandoz is a leader in the decades to come,” Narasimhan said in a recorded presentation in which he went over the entire Novartis busiess. “But what I can say is that we are working on in it…. to make sure we have a thoughtful, disciplined approach to ensuring Sandoz’ success.”
The new CEO said that the company is looking at “all options” to maximize the unit’s position in the U.S. but won’t mess it up in the process. “We have to hold ourselves to ensuring we don’t destroy value with any of the actions we may or may not take.”
Reports have indicated that one of those options is the likely sale of its dermatology business and a portfolio of other assets that is likely to bring bids of $2 billion or more. China’s Fosun and India’s Aurobindo have reportedly made offers. It is also selectively paring away unprofitable products.
Narasimhan allso said that while Sandoz has had a couple of setbacks in biosimilars in the U.S., he is sure that market will be a winner eventuall. The FDA has rejected a couple of its biosims, including this month when it refused to approve Novartis’ substitute for Roche’s blockbuster Rituxan. The CEO said Sandoz is learning from those “recent setbacks.”
By Eric Palmer
Source: Fierce Pharma