Novartis and GlaxoSmithKline (GSK) have announced a definitive agreement to exchange certain assets, building global leadership in key segments and focusing the company’s portfolio.
Novartis has agreed to acquire GSK oncology products for a USD 14.5 billion payment and up to USD 1.5 billion contingent on a development milestone. Under the terms of the transaction, Novartis would have opt-in rights to GSK’s current and future oncology R&D pipeline.
in return, GSK will acquire Novartis’ vaccines business, currently excluding its flu business, for USD 7.1 billion plus royalties. The USD 7.1 billion consists of USD 5.25 billion upfront and up to USD 1.8 billion in milestones.
The companies have also agreed to create a consumer healthcare business through a joint venture. Upon completion, Novartis will own a 36.5% share of the joint venture and will have four of eleven seats on the joint venture’s Board.
Separately, Novartis announced a deal with Eli Lilly to divest the Animal Health Division.
Novartis has announced additional steps to further its transparency around clinical trial data. Researchers can also now request access to patient level data on newly approved innovative medicines in 2014 through the ideaPoint portal.
Novartis has long supported data transparency and was the first company to publish positive and negative study results of its innovative medicines within one year of the study completion further enabling clinical research while protecting patient privacy.
To date, Novartis has registered 2,720 trials on ClinicalTrials.gov and published 559 trial results on the same site as well as 1,777 clinical study summaries (known as “redacted clinical study reports”).
The Swiss newspaper Neue Zuercher Zeitung is reporting that up to 4000 jobs at Novartis are expected to be cut or moved to Hyderabad over the next 12 months. This comes weeks after CEO Joe Jiminez told investors he intended to increase operating margins.
The Swiss pharma company recently issued an upbeat Annual Report, but financial performance did not live up to investors’ expectations. The company has been following a programme of restructuring since 2007, including the closure of 15 sites; however, in 2013 the company’s headcount rise by around 8000.
Many of the affected jobs are thought to be in the company’s pharmaceutical division, particularly in data management, although some back-office functions are also expected to be involved.
In an interview with BBC India Business Report, the head of Novartis in India, Ranjit Shahani, suggested that pharma R&D investment in India will cease following the Supreme Court decision not to grant the Swiss pharma company a patent for its oncology drug Glivec. He explained that Novartis was “disappointed” by the court’s decision, and stressed that 95% of Indian patients prescribed Glivec receive it free of charge.
In the context of the interview, it is not clear whether Mr Shahani’s comments are a formal statement of Novartis’ intent to stop all R&D in India immediately (there is no mention of this on the Novartis website), or a more general “sea change” in industry sentiment towards the country, with several big pharma companies losing out recent court cases around intellectual property.
Click here to watch the full interview on the BBC website.
The decision today by India’s Supreme Court to deny Novartis a patent for its cancer drug Glivec® (imatinib mesylate) has been welcomed by Indian patient activists and generics manufacturers. However, it causes concern for the Swiss pharma company, along with Pfizer, Bayer and Roche, who are currently challenging patent decisions in India for their drugs Sutent, Nexavar and Pegasys respectively. The implications for pharma investment in R&D in India will also be worrying for the growing India CRO sector.
The Supreme Court ruled that the patent application was an example of “evergreening” – making a small alteration to an existing drug in order to gain additional patent protection. The compound is based on a drug originally patented in 1993, and its patent in the USA was granted an extension to expire in 2015. Ranjit Shahani, Vice Chairman and Managing Director, Novartis India Limited, stated that “Novartis has never been granted an original patent for Glivec in India” and that the company “provides Glivec free of charge to 95% of patients prescribed the drug in India, currently more than 16,000 patients”.
The ruling also raises questions around global pharma’s willingness to invest in India, which has a massive population although many of them cannot afford conventional drug prices. Issues around protection of Intellectual Property have dogged India for many years, with pharma patenting only being introduced in 2005. Novartis has previously said it needs legal certainty if it is to plan further investment in drug research in India, and other companies will doubtless be considering this when distributing their global R&D investment.