Novartis

The Group is headquartered in Basel, Switzerland. Novartis operates in more than 140 countries, employing approximately 120,000 employees (May 2012).

Structure

The Novartis group of companies offers solutions in the field of health protection. Novartis consists of six business divisions:

• Pharma: Innovative prescription drugs
• Alcon: full range of vision protection products
• Sandoz: High-quality generics and biosimilars
• OTC: Over-the-Counter Remedies
• Vaccines and Diagnostics: Vaccines and Test Systems
• Animal Health: Animal Preparations

Performance indicators

2023: On the list of companies with the largest R&D costs

The chart shows 12 months of data as of April 2023.
For Amazon shows the costs of technology and content (not R&D).
ByteDance statistics date back to 2021 (according to the Wall Street Journal)

2021: 3rd in the world in terms of prescription drug sales: $51.1 billion

Data for 2021

2020: Global Pharmaceutical Market Share - 5.2%

Novartis's share in the global pharmaceutical market was 5.2%. Read more here.

2011: Sales volume - $58 billion

In 2011, sales of the group exceeded $58 billion. United States, more than $9 billion The United States was invested in scientific research and development.

Business in Russia

Novartis is the largest pharmaceutical group operating in Russia for more than 100 years and occupying a leading position in the drug market.

2022: Suspension of investment in Russia

The Swiss pharmaceutical Novartis AG is reducing its presence in. Russia This became known on March 17, 2021. She also suspends investments commercial activities due to a special operation on. To Ukraine The company's plant St. Petersburg will continue to produce medicines for the Russian market. As of March 2022, about 2 thousand people work at the enterprise. According to reports, Reuters Novartis will also stop marketing the activities and holding scientific of events [^[1]

2020: Support for the project "About Moles"

AIM, a resident of the Skolkovo Foundation Biomedical Technology Cluster, has signed a one-year contract with Novartis. The Skolkovo Foundation announced this on December 28, 2020. The global pharmaceutical company will support the socially oriented solution "about moles," which allows you to detect malignant skin neoplasms, such as melanoma, using a regular smartphone and artificial intelligence technologies. Read more here.

2019: Natalia Kolerova is the new president of Novartis in Russia

In early August 2019, it became known about the appointment of Natalia Kolerova to the post of president of Novartis in Russia instead of Vadim Vlasov, who headed the company since 2010. Read more here.

Falcon Office: Largest Lease Deal 2012

In May 2012, it became known that the first long-term lease deal was concluded in the Alcon class A business complex. The Novartis AG group of companies will open its office in it with a total area of ​ ​ 16,000 square meters. m The deal was concluded during the unfinished construction of the building and became the largest agreement in the first 5 months of 2012 in the office real estate market. The project was consulted by Knight Frank.

Alcon is a bright project in the office market, real estateMoscow which is a class A business quarter with its own infrastructure, original design of public areas and an interesting architectural solution for buildings. The complex is located in the north of Moscow, within walking distance of Art. m. "Sokol" - an actively developing business zone of the capital. The total area of ​ ​ the business quarter is 102,177 sq. m, 66,776 sq. m of which is its rental part. The territory of the complex also includes a two-level underground parking for 1016 parking spaces (parking coefficient 1/60). It is scheduled to complete construction in August 2012. The developer is ALCON Development.

The reasons for the search for a new premises in Novartis were the systematic growth of business and headcount. The new Novartis office will occupy the third to eleventh floors of Building A and will initially accommodate about 1,200 employees. The company plans to begin finishing work on the readiness of the building and move to new premises in the second half of 2013.

History

The Novartis group of companies appeared in 1996 as a result of the merger of two companies: Siba Geigi and Sandoz.

During its existence, Novartis managed to transform from a multidisciplinary to a company specialized exclusively in healthcare.

Since its formation, Novartis has been actively developing in specialized markets, as well as acquiring new companies, for example, Hexal and Econ Labs, thereby strengthening and turning its generic business division into a world leader in this industry, or Chiron Vaccines in 2006, significantly strengthening its position in the market for vaccines and diagnostic test systems.

2023

Novartis bought the manufacturer of drugs for the treatment of nephropathy Chinook Therapeutics for $3.5 billion

On August 11, 2023, the multinational pharmaceutical corporation Novartis announced the acquisition of the American biotechnology company Chinook Therapeutics. The deal amounted to $3.5 billion. Read more here.

$2.5 billion sale of eye drop business

On June 30, 2023, Novartis announced an agreement to sell ophthalmic assets to Bausch + Lomb. The total amount of the transaction is $2.5 billion, including $1.75 billion in advance, as well as additional phased payments.

The agreement provides for the transfer of assets related to Xiidra. It is a specialized prescription agent for the treatment of dry eye syndrome. This disease is a widespread pathology in which the amount and quality of tear fluid produced that moistens the lining of the eye is reduced. When normal, the tear film is renewed and moisturizes the eyes with each blink. However, in dry eye syndrome, this process is disrupted, leading to irritation of the mucous membrane, redness and burning.

Novartis sells $2.5 billion eye drop business

In addition, under the agreement, the developments related to the investigational drug SAF312 (libvatrep) will be transferred. This product is being developed as a first-in-class treatment for chronic pain on the surface of the eye.

Bausch + Lomb has also acquired the rights to use AcuStream delivery technology for dry eye and OJL332 indications, a second-generation TRPV1 antagonist in preclinical development. The deal is scheduled to close in the second half of 2023, subject to necessary regulatory approvals.

This acquisition is a prime example of our strategy in action as it provides the necessary scale for the company and transforms our pharmaceutical business, making us a leader in ocular surface disease. The deal is also expected to accelerate margin gains with more pharmaceutical products in our grocery family, "said Brent Saunders, Chairman and CEO of Bausch + Lomb.[2]

2022

$245 million fine for squeezing competitors out of the market

On December 28, 2022, the pharmaceutical company Novartis announced that it had reached an agreement as part of antitrust proceedings related to the release of generics of Exforge. Novartis will pay $245 million to resolve the conflict.

The proceedings in question were initiated in 2018. The plaintiffs include CVS Health, Kroger, Rite Aid, Walgreens Boots Alliance and others in the pharmaceutical market. The case relates to a licensing agreement signed in 2011 between Novartis and Endo International, a division of Par Pharmaceutical. It relates to said Exforge drug product for lowering blood pressure.

Pharmaceutical company Novartis secured an agreement as part of antitrust proceedings

Under the terms of the contract, Par Pharmaceutical agreed not to market the generic Exforge for two years after the expiration of one of Novartis' key patents for the drug. In turn, Novartis pledged not to compete with Par Pharmaceutical within a 180-day period when it begins selling a generic of this drug.

The class action lawsuit accused Novartis and Par Pharmaceutical of entering into an illegal "reverse payment" agreement to delay the release of Exforge's less expensive counterparts to treat hypertension, lower blood pressure and reduce the risk of strokes. The defendants were charged with violating antitrust laws in order to squeeze competitors out of the American pharmaceutical market. According to court documents, the annual sales of Novartis' brand-name Exforge in the United States before generic drugs were approximately $400 million or more. The settlement agreement reached on the payment of $245 million must now be approved by the judge.^[3]

Cutting 8,000 jobs worldwide

On June 28, 2022, Novartis announced the dismissal of 8,000 of 108 thousand employees worldwide in an attempt to save $1 billion by 2024. The company said that the reduction in the number of personnel will be made as part of the restructuring of the business, and the restructuring in Novartis is expected to be completed by the end of the summer of 2022.

According to the pharmaceutical company, the changes will make Novartis more frugal and simple, so the company intends to liquidate roles throughout the organization, according to the company. Employees of the company have already been notified of the upcoming changes. In addition, Novartis consolidates its technical and customer and technology operations into a single operational division. The drugmaker is making progress on all these changes and has appointed a majority of executives.

Novartis in crisis. The company is cutting 8,000 jobs worldwide

{{quote "The production capacity of residents is loaded, and new investment projects are being implemented, companies are developing new products to expand their product lines and are looking for ways to optimize various business processes. Management and content becomes expensive and clumsy. Even if the operational processes are set up well, the legal structure can interfere with rapid and correct development, "said Novartis CEO Vasant Narasimhan. }} According to Narasimhan, the restructuring is a deliberate change in the structure of Novartis and its components to improve business efficiency. This is a legally difficult process, and before deciding on restructuring, you need to weigh the pros and cons. Narasimhan added that the management of Novartis forced the growth of management costs to take this step, he assesses the decision to reduce Novartis personnel positively for investors, since the monopoly staff is very inflated, and the upcoming reduction will be an incentive for the company's employees to work with greater returns.^[4]

Hackers stole laboratory data and posted it on the Web

On June 3, 2022, the pharmaceutical company Novartis reported a cyber attack on its infrastructure. The company added that no sensitive data was compromised in a cyber attack by the Industrial Spy data extortion group.

Industrial Spy is a hacker organization that extorts and sells data stolen from hacked organizations. On June 2, 2022, a hacker group began selling data allegedly stolen from Novartis on its Tor trading platform for $500,000 in bitcoins.

Hackers stole laboratory data and posted it on the Web

Hackers claim that the data is related to technologies and tests of drugs based on RNA and DNA from Novartis and were stolen "directly from the laboratory environment of the manufacturing plant."

The data sold consists of 7.7 MB PDF files, all of which have a time stamp of 2/25/2022 04:26, probably that's when the data was stolen. Since the amount of data put up for sale is minimal, it is unclear whether this is all data that hackers have stolen, or whether they still have data for subsequent sale.

{{quote 'Novartis is aware of what happened. We have conducted a thorough investigation and can confirm that no sensitive data has been compromised. We take data privacy and security very seriously and have taken industry-standard action in response to such threats to ensure the security of our data, Novartis said in a statement. }} Novartis declined to answer further questions regarding the hack, the time it took place and how the hackers gained access to their data. Industrial Spy is also known to use ransomware in attacks, but there is no evidence that Novartis equipment was encoded during the incident.^[5]

2021

Purchase of eye treatment systems developer Gyroscope Therapeutics for $1.5 billion

On December 22, 2021, Novartis announced a final agreement to acquire all shares of Gyroscope Therapeutics, an eye disease gene therapy company. Novartis will pay an advance payment of $800 million, and the remaining $700 million later. Until the deal closes, Novartis and Gyroscope Therapeutics will continue to operate as separate and independent companies. Read more here.

Buying multiple sclerosis drug developer Cellerys

In early June 2021, Swiss drug maker Novartis signed an agreement to acquire Cellerys, a Zurich-based startup that conducts research into therapies to combat multiple sclerosis. Cellerys was founded in 2015 by multiple sclerosis researchers as a subsidiary of the University of Zurich. Novartis did not provide any financial details of the deal. Read more here.

Longmont plant closure, 400 employees laid off

At the end of March 2021, the pharmaceutical company Novartis announced the closure of its 642.8 thousand square meters drug plant in Longmont, as well as the dismissal of 400 employees.

The Swiss company said in a statement that it will close the six-building complex no later than July 9, 2021. Approximately 400 full-time employees at the facility will be offered severance pay, employment assistance and some benefits. An unspecified number of employees will be offered the opportunity to move to their remaining businesses or be asked to stay with the company as remote employees.

The pharmaceutical manufacturer hoped that in order to meet the expected demand, it would need a plant in Longmont, along with subsidiaries in Libertyville (Illinois), and Durham (North Carolina), but later decided that it would be able to meet all demand only at the expense of these sites.

Novartis to close Longmont plant, lay off 400 employees after falling sales of world's most expensive drug

Novartis opened the plant in January 2020 with the hope of bringing it into compliance with federal standards of pharmaceutical institutions in order to produce from 800 to 1200 doses of Zolgensma for the treatment of spinal muscular atrophy (SMA ). The treatment is a one-time intravenous injection that aims to combat the effects of SMA. This drug is the most expensive in the world: a single dose is $2.1 million. Novartis' latest annual report shows a drop in sales of the drug in 2020.

Colorado Biosciences Association Vice President Emily Roberts noted that the trade group does not believe Novartis' departure will undermine the industry's momentum in the state. She pointed to large operators such as contract manufacturer AGC Biologics, which embarked on a procedure to acquire AstraZeneca's former Boulder facility in June 2020, as well as start-ups as businesses that can hire Novartis staff.^[6]

2020: Purchase of schizophrenia drug developer Cadent Therapeutics

In mid-December 2020, Novartis announced the acquisition of the neuroscience company Cadent Therapeutics. It is reported that the American developer of treatments for cognitive and mood disorders will cost the buyer $770 million. Read more here.

2019

Mastering digital technology to rethink medicine

By mid-December 2019, Novartis is actively introducing digital technologies into its work in order to rethink the modern approach to medicine and pharmaceuticals.

In a highly regulated space such as the pharmaceutical industry, the process of digital transformation is slower than in other sectors. Nevertheless, Novartis focused on changing the approach to modern technologies, trying to use the incoming data with the greatest benefit.

Novartis is actively introducing digital technologies into its work

Among other things, Novartis has developed a new platform, Nerve Live, which is designed to use the firm's huge data pool. Faster and more thorough data analysis using artificial intelligence and machine learning will help the company research and develop new drugs.

The pharmaceutical company is also gradually mastering cloud technologies. In December 2019, Novartis announced a partnership with Amazon Web Services that will help the company review its manufacturing and business operations.

In October 2019, Novartis launched a Microsoft collaboration to engage artificial intelligence in drug discovery and development. The partners also took up solutions for creating and analyzing intelligent and personalized cellular and gene therapies.

In addition, Novartis has a position as director of digital technology. It was occupied by Bertrand Bodson, who was previously the director of digital technology and marketing of the British retail network Argos.

We are trying to rethink medicine through the analysis of user data and new technologies, "explained Loic Giraud, head of business analytics at Novartis. - We are trying to optimize the basis of our everyday analytical processes for the digital transformation of the entire business. Thanks to cloud technologies, we can use big data to implement innovative solutions.

Joining Giraud's words was Accenture Chief Application Solutions Officer Vikas Sindwani:

Industries such as healthcare, metallurgy and mining have lagged behind the universal digital transformation because of concerns about data security. However, the overall picture is slowly changing.[7]

Novartis heavily punished for bribing doctors

On July 18, 2019, Novartis announced the allocation of $700 million to settle litigation over bribery of doctors. The Swiss pharmaceutical giant wants to close a chapter on allegedly aggressive business practices that expose the company to legal risks.

In line with our efforts to resolve compliance charges, we are now working to resolve disputes in the civil suit [...] after public appearances and other promotional events that took place between 2002 and 2011, Novartis CEO Vas Narasimhan said during a conference call on the publication of the company's financial statements.

Novartis will pay $700 million for bribing doctors

The US government previously filed a lawsuit against Novartis, accusing one of the company's divisions of paying multibillion-dollar kickbacks to doctors in exchange for prescriptions for their drugs

According to the American authorities, the company bribed doctors, including organizing sea fishing for them off the coast of Florida and dinners at restaurants in the Hooters chain, which feature waitresses in sexy outfits. Novartis also invited doctors to expensive restaurants - as an example, officials cited dinner for three doctors on February 14, 2006 at an institution where the amount of the bill per guest was $1,042.

27 US states, as well as the District of Columbia, the cities of Chicago and New York, are demanding triple damages from Novartis in connection with the violation of the federal law on falsified claims (False Claims Act), which implies responsibility for deceptive actions damaging state programs.

The rollbacks "not only raise the question of the integrity of individual medical decision-making, but raise the cost of health care," according to Assistant U.S. Attorney General Stuart Dereley^[8]

Separation of the ophthalmic division into a new company and its listing on the stock exchange

In early April 2019, Novartis separated the ophthalmology division into a new company called Alcon and listed it. Novartis estimated Alcon's market value at $25 billion. Read more here.

The government caught Novartis in kickbacks to doctors

In early April 2019, the US government accused Novartis of kickbacks to doctors. The company claims that the authorities do not have enough evidence. However, a district judge rejected the pharmaceutical giant's bid for a retrial and ruled that the government did not need to prove there was an immediate agreement between Novartis and doctors to make the company liable. This means that if Novartis fails to pay the fine, the case will go to trial.

The case was opened in 2011 at the suit of former Novartis sales representative Oswald Bilotta. The US government tapped into the investigation in 2013, accusing Novartis of paying kickbacks to doctors who prescribed the company's drugs in exchange, such as antihypertensive drugs Lotrel and Valturna and the hypoglycemic drug Starlicks.

Novartis accused of bribing US doctors

Those kickbacks include fees for speaking publicly at educational events. At the same time, for example, one doctor was paid eight times to speak in his own office. According to the lawsuit, the company also provided doctors with kickbacks in other forms - for example, a dinner worth $9,750 for three in a Japanese restaurant.

The lawsuit noted that between 2002 and 2011, government Medicare and Medicaid health insurance programs received multimillion-dollar bills for drugs prescribed by such doctors. The government is seeking threefold damages.

Novartis has previously had to pay fines for illegal methods of promoting its drugs. In 2010, the company agreed to pay $422 million to settle various civil and criminal charges. In October 2015, Novartis agreed to pay US $390 million for kickbacks to two pharmacies in order to promote its drugs. In both cases, the company pleaded not guilty.^[9]

2018: $8.7 billion purchase of gene therapy drug maker AveXis

On April 9, 2018, Novartis announced the acquisition of gene therapy drug manufacturer AveXis. The transaction value is $8.7 billion. Read more here.

Notes