Since becoming CEO of Novartis last year, Vas Narasimhan has sought to rebuild the $200 billion drugmaker's image, committing to repairing public trust and to a vision of the company as a leader in cutting-edge therapies like cell and gene therapy.
A new scandal involving manipulated testing data used by Novartis to win a landmark approval of Zolgensma, the world's priciest drug, could imperil both of those aims.
Novartis knew of the data irregularities, which involved a test in mice of Zolgensma's potency, for two months before the gene therapy's clearance by the Food and Drug Administration on May 24.
But the Swiss pharma did not inform regulators until June 28, a delay that led the FDA on Tuesday to issue a rare public warning of potential civil or criminal penalties for AveXis, the biotech developer of Zolgensma which Novartis bought last year.
Speaking to investors and Wall Street analysts on a Wednesday conference call, Narasimhan defended his company's response to learning of the data issues.
"We tried to do the right things in this instance," said Narasimhan. "We understand the agency has a different perspective, which we respect."
Novartis said it was in the process of "exiting" the "small number" of AveXis scientists who were involved in the data inaccuracies.
The FDA has reiterated its confidence in the clinical results supporting Zolgensma's approval and on Tuesday affirmed its view that the gene therapy should remain on the market.
"Out of the large amount of submitted information reviewed by the agency, our concerns at this time are limited to only a small portion of the product testing data that was contained in the marketing application," said Peter Marks, head of the FDA's Center for Biologics Evaluation and Research, in a statement.
But the FDA's statement, along with an internal memo also disclosed Tuesday, make clear that the regulator has serious concerns with how Novartis informed the agency of the problem.
Had the FDA known of the manipulated data prior to giving an OK to Zolgensma, it would have delayed its decision in order to further investigate, the memo states.
Use of the assay in question was discontinued in June 2018 in favor of a newer test that Novartis currently uses in manufacturing of Zolgensma. But results from that test were important to compare an early version of Zolgensma to the version later used in Phase 3 testing.
In mid-March this year, AveXis received allegations that data had been manipulated, a claim which Novartis says it immediately began to investigate. According to Narasimhan, the first part of Novartis' assessment involved an independent investigation "with support of external counsel."
Upon substantiating the data discrepancies, Novartis then launched a full technical quality investigation, results of which it communicated to the FDA on June 28.
"We made the decision to progress our quality investigation prior to informing the FDA and other regulatory authorities so that we could provide the best information and technical analysis, which we did promptly on completion on June 28," said Narasimhan.
On the Wednesday conference call, Novartis head of regulatory affairs, Rob Kowalski, characterized Novartis' approach as standard.
"It was normal course of business and pretty typical for how we handle these items," Kowalski said, noting that at no point did Novartis think the data issues raised the possibility of patient harm.
Still, the timing of Novartis' reporting to the FDA raises questions of whether it saw a risk to securing approval for Zolgensma, the chief treatment acquired in its $8.7 billion acquisition of AveXis.
Narasimhan rejected that possibility Wednesday, claiming that the company's response was not held back due to the timing of its application.
Zolgensma is approved to treat infants with spinal muscular atrophy, a rare neurodegenerative disease that is usually fatal in its most severe form. Clinical testing showed the therapy helped infants achieve functional milestones not typically achieved, and raised the possibility of whether Zolgensma could be a cure if given sufficiently early.
The therapy is only the second gene therapy for an inherited disease to win FDA approval, and its OK marked a major milestone for the growing field. At $2.1 million per patient, however, Zolgensma is also the most expensive drug ever brought to market.
Given those stakes, Zolgensma is a key piece of Narasimhan's efforts to reimagine Novartis as a "leading medicines company."That its approval is now under a cloud adds another costly distraction for a company that only last year was forced to fend off allegations of buying access to the White House through President Donald Trump's former lawyer Michael Cohen.
"We are committed to rebuild trust with society deeply," said Narasimhan. "It's a long road and sometimes it's bumpy."