Commercial Novartis Cuts 10% of Pipeline Programs to Focus on...

Novartis Cuts 10% of Pipeline Programs to Focus on Commercial Potential


Novartis is eliminating its pipeline the old-fashioned way. The Swiss pharmaceutical company has chosen to dump or license out 10% of its research and development projects in order to concentrate on five primary therapeutic areas and provide resources for the most promising products in those fields.

Novartis has recently redirected its research and development efforts into five therapeutic areas: cardiovascular, hematological, solid tumors, immunology, and neurology, as well as a select group of technological platforms. Disclosures concerning discontinued joint ventures have been made recently, suggesting a shakeup is in the works at Novartis. The company has now finally revealed its streamlined pipeline.

In a media call, CEO Vas Narasimhan said, “We reduced our pipeline size by about 10%. And that’s primarily as we prune assets that are outside of those five core therapeutic areas, or in the sixth area we call TAX which incubate certain therapeutic areas we’re interested in. So we’ve taken the principal decision that if it doesn’t fit within that framework, we are either going to stop the programs or divest them.”

In a follow-up call with investors, Narasimhan elaborated on the decision, saying that comparing Novartis’ R&D against those of other Big Pharmas had contributed to the pipeline “cleanup.” We invested less per project than our competitors since we were working on more overall, he stated. He also noted that with sufficient funding in the pre-clinical or early-clinical stage, the company could advance more rapidly and broadly into different avenues of therapy and additional indications.

The modifications have resulted in a decrease from 150 to 134 items in Novartis’ pipeline. Between the two updates, the number of active projects pertaining to solid tumors had the largest decline, decreasing from 42 to 32. This is despite the fact that this field of research remains a top priority. 

Narasimhan explained to investors why Novartis cut back so drastically on early-stage cancer assets by saying that the firm has eliminated prospects whose targets were no longer priority tumors.

Due to the company’s reorganization, thousands of Novartis employees have lost their jobs, and the generics division, Sandoz, is now being spun off. In February, it abandoned efforts to develop drugs for sickle cell illness and Huntington’s disease and relinquished its license rights for a treatment for a specific form of fatty liver disease.

With a 16% rise in volume and a 4% decline in price, Novartis’ first-quarter revenues were up 3% year over year to almost $13 billion. Sales were also harshly affected by generic competition.

Entresto, the company’s drug for heart failure, saw its sales climb by nearly 30% to $1.4 billion, while Cosentyx, used to treat inflammatory diseases, saw a fall of 7% to $1.1 billion.

Novartis’ cancer medications also performed exceptionally well. Fourth-quarter sales of Kisqali, a medicine used to treat breast cancer, increased by 74% year-on-year to $415 million, while sales of Pluvicto, a drug used to treat prostate cancer, increased by 36% to $211 million. Novartis is increasing manufacturing of Pluvicto in response to high demand and limited availability. 

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