Novartis announces new organizational structure

By Rachel Arthur contact

- Last updated on GMT

Pic:getty/DimitriOsis
Pic:getty/DimitriOsis

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Novartis has created a new organizational structure and operating model: which it says will make the company more agile and competitive.

The Basel-headquartered company will integrate its pharmaceuticals and oncology business units; create a new operations unit; and create a new strategy and growth function.

The company says such operational improvements will ensure at least 4% sales growth (CAGR 2020-2026); as well as create SG&A savings of at least $1bn by 2024.

“The simpler organizational model we are unveiling is central to our growth strategy as it will make us more agile and competitive, enhance patient and customer orientation, unlock significant potential in our R&D pipeline and drive value-creation through operational efficiencies,”​ said Vas Narasimhan, CEO Novartis. “With our portfolio of in-market medicines and up to 20 major pipeline assets that could be approved by 2026, Novartis is in a strong position to deliver above-peer-median sales and margin growth in the mid- and long-term.”

Three leading executives are exiting the company including Susanne Schaffert, president, Novartis oncology, Robert Weltevreden, president, customer and technology solutions and John Tsai, president, global drug development and chief medical officer.

Integrating pharmaceuticals and oncology business units

Novartis said it will integrate the pharmaceuticals and oncology business units and create two separate commercial organizations with a stronger geographic focus, trained on the US and international markets.

The two units will have full P&L responsibility across all therapeutic areas and ownership of customer experience, marketing and sales, and market access for their respective markets.

“The elevation and establishment of an independent US commercial organization strengthens Novartis’s ability to achieve its goal of becoming a top-five company in the US in terms of sales while maintaining and growing its leadership position internationally,”​ said the company.

“The new model will also help Novartis bring increased focus and commitment to its core therapeutic areas of cardiovascular, hematology, solid tumors, immunology and neuroscience.”

Marie-France Tschudin will take on the role of chief commercial officer and head of the international division, while Victor Bulto, currently head of the US pharmaceuticals unit, will lead the US unit.

Strategy and growth focus

The company also reported that it is creating a new strategy and growth function combining corporate and R&D portfolio strategy along with business development. It outlined how this function will look to internal and external opportunities to strengthen the company’s pipeline with medicines that are both transformational and can make significant contributions to growth.

The Swiss group plans to appoint a chief strategy and growth officer, reporting directly to the CEO, to lead the new function. Lutz Hegemann, president, global health at Novartis, will take on that role in the interim.

Operations

Novartis will combine its technical operations and its customer and technology solutions units as well to create a new operations unit. Steffen Lang, currently global head of Novartis technical operations, will become president of that new unit, reporting to the CEO.

The pharma giant announced, along with those changes, that it has rehired Shreeram Aradhye to head up its global drug development team and also to become its chief medical officer, effective May 16, 2022.

Dr Aradhye was most recently executive VP and chief medical officer at Dicerna Therapeutics, where he led the development of multiple clinical stage RNAi assets.

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