Novartis splits drugs unit, pharma chief to depart
- Novartis will split its oncology business from its pharmaceuticals division in a major reorganization aimed at driving growth following last year's asset swap with GlaxoSmithKline. David Epstein, the veteran head of Novartis Pharmaceuticals, will leave the company.
- The new Novartis Oncology and Novartis Pharmaceuticals units will both be organized under a newly created Innovative Medicines group.
- Novartis stock has fallen steadily over the past year as its eye-care unit Alcon has struggled and profits have dropped. First-quarter income came in 13% lower than one year ago with lower sales from mainstay drugs which now face generic competition.
Last March, Novartis swapped its vaccines business for GlaxoSmithKline's oncology unit, gaining the melanoma drugs Taflinar and Mekinst along with several other cancer drugs. Novartis said the new organization would reflect the increased importance of oncology to the company and allow it to better drive growth in each separate unit.
Paul Hudson, currently head of AstraZeneca's North America unit, will become CEO of Novartis Pharmaceuticals while Bruno Strigini will lead Novartis Oncology. Strigini has run the company's oncology business since 2014.
Both will report directly to Novartis CEO Joe Jimenez.
But Novartis will lose six-year veteran David Epstein in the reorganization process. Epstein oversaw the launches of the blockbuster drugs Glivec and Gilenya, as well as new entrants Cosentyx and Entresto.
"He built our leading Oncology business and over the last six years has steered our Pharmaceuticals Division through a period of excellence in innovation, execution and improved financial results," said Jimenez.
Epstein has been named in some reports as a possible successor to GlaxoSmithKline CEO Andrew Witty, who plans to step down in 2017. Novartis said Epstein plans to "explore new challenges from the U.S."
In addition to the new Innovative Medicines division, Novartis will maintain its existing generics unit Sandoz and eye-care unit Alcon.
Follow Ned Pagliarulo on Twitter