Novartis unveils major re-org

April 4, 2022

Novartis has announced a new organizational structure and operating model, with an eye on innovation and growth — as well as targeted savings of at least $1 billion by 2024.

The Swiss giant's new "simplified structure and operational set-up" will integrate the pharmaceuticals and oncology business units, creating two separate commercial organizations with a stronger geographic focus — Innovative Medicines U.S. and Innovative Medicines International.

“The simpler organizational model we are unveiling today 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 Novartis CEO Vas Narasimhan.

Additionally, Novartis is creating a new position that will oversee corporate strategy, R&D portfolio strategy and business development. The search is currently underway for this new leader, but in the interim, the function will be led by Lutz Hegemann, M.D., Ph.D., president, Global Health.

The shuffle will also trigger some executive departures. Susanne Schaffert, Ph.D., president, Novartis Oncology, Robert Weltevreden, president, Customer & Technology Solutions and John Tsai, M.D., president, Global Drug Development and Chief Medical Officer will leave Novartis. Tsai will be replaced by Shreeram Aradhye, who is returning to the company from Dicerna Pharmaceuticals.

Additional changes to the Executive Committee of Novartis (ECN) include:
• Marie-France Tschudin appointed president, Innovative Medicines International and Chief Commercial Officer
• Victor Bulto appointed president, Innovative Medicines U.S.
• Steffen Lang, Ph.D., appointed president, Operations

The re-org comes amid a separate discussion about the fate of Novartis' generic arm, Sandoz. Last fall, Novartis resurfaced talks about selling or spinning off Sandoz. According to Narasimhan, Novartis began ongoing strategic review of Sandoz to decide if it’s still a good fit with the company’s long-term growth plans back in October.

Under Narasimhan, Novartis has sharpened its focus on innovator drugs such as gene therapies, which could impact its decision about whether to keep Sandoz under its sphere. Despite turning towards higher-value drugs like gene therapies, Novartis’ earnings fell somewhat in 2021.