Novartis CEO Bets on Cutting-Edge Science to Remake Drug Giant - (The Wall Street Journal via NewsPoints Desk)

  • Novartis has spent nearly $15 billion in the past year to build its presence in cutting-edge areas of medical research, including gene therapy and radiopharmaceuticals, reported The Wall Street Journal.

  • The deals build on Novartis' early move into CAR-T cell therapies, and highlight CEO Vas Narasimhan's ambition to get ahead on innovative therapies that he believes will drive significant future growth. "We thought if we could gain a leadership position it'd be harder for competition to take us on," he said.

  • At a recent investor event, Narasimhan said he hopes such therapies will generate a fifth of Novartis' revenue within five years. He also acknowledged that risks were higher than with conventional drugs, but added that "there's a risk in not pushing into new technologies and new areas of science to find breakthrough medicines."

  • Novartis paid $3.9 billion in October 2017 for Advanced Accelerator Applications, which makes a radiopharmaceutical for a rare form of gut and pancreas cancer, and recently said it would pay $2.1 billion for radiopharmaceutical specialist Endocyte.

  • Novartis has also acquired AveXis, which is developing a gene therapy aimed at a fatal infant muscle-wasting disease, for $8.7 billion, and struck a licensing deal in January giving it the right to sell Spark Therapeutic's gene therapy Luxturna, which costs $850 000 per patient, for a rare eye disorder in Europe and other markets outside the US.

  • Meanwhile, Novartis says its leading gene therapy would be cost-effective at $4 million a patient, putting it in line with less expensive medicines that need to be taken repeatedly, although the company has yet to decide pricing. The drugmaker is talking with some insurers about different ways to pay, such as in installments or depending on how well patients respond to therapy.

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