In­no­va­tion will be No­var­tis’ pri­or­ity in 2016, its chief says

China Daily (Canada) - - BUSINESS - By CHI­NADAILY

Joseph Jimenez, CEO of the Swiss phar­ma­ceu­ti­cal gi­ant No­var­tis International AG, is a ti­tan in the industry. A few years ago, he was named one of the 25 most in­flu­en­tial people in bio­pharma.

Since tak­ing over as CEO in 2010, he has con­sis­tently stressed the need for in­no­va­tion and a new strat­egy as a “pa­tent cliff” threat­ened ma­jor drug­mak­ers.

Pa­tent cliff refers to the po­ten­tial sharp de­cline in rev­enues upon the ex­piry of drug patents owned by a com­pany.

No­var­tis is set to lose pa­tent pro­tec­tion for some of its drugs soon.

De­spite the loom­ing threat, the com­pany per­formed pretty well last year.

Jimenez said he be­lieves China will be one of its main three mar­kets in five years.

He praised the gov­ern­ment’s ef­forts to re­duce what he called China’s drug lag, or the de­lay in getting new drugs to pa­tients.

Jimenez spoke toChina Daily re­cently. The fol­low­ing are ex­cerpts from the in­ter­view:

How did No­var­tis per­form last year? What is your fore­cast for this year?

No­var­tis had a good year in 2015. Aside from com­plet­ing our port­fo­lio trans­for­ma­tion, which fo­cused on three big di­vi­sions— in­no­va­tive medicines, eye care (Al­con) and gener­ics (San­doz) — we also had a good fi­nan­cial per­for­mance. Our sales were up 5 per­cent in lo­cal cur­ren­cies and there was a dou­ble-digit profit in­crease.

The best part, how­ever, was in­no­va­tion. We had more new drug ap­provals in Europe and the United States last year than any other phar­ma­ceu­ti­cal com­pa­nies. And we also launched two very im­por­tant new drugs. One is for chronic heart fail­ure. There have not been new ther­a­pies for 20 years in heart fail­ure. The other is for pso­ri­a­sis. Over­all, 2015 was a very good year for the com­pany.

In 2016, we lose pa­tent pro­tec­tion for our block­buster (can­cer) drug Gleevec in the US and we’ll lose the pa­tent in Europe next year. This will be a year that we lose pa­tent pro­tec­tion, but we will also start to ramp up new­drugs.

The over­all pri­or­ity for 2016 is to keep the in­no­va­tion strong be­cause in­no­va­tion is the core of our busi­ness. If we can con­tinue to strengthen the pipe­line with new drugs, gain new ap­provals, we’ll be a very strong com­pany.

How about China? How much did the Chi­nese mar­ket con­trib­ute to your busi­ness?

We don’t pro­vide coun­try level breakup of rev­enues. But I can tell you that five years ago, China was in our top 20 coun­tries. It’s cur­rently in our top 10 and within five more years, China will be in our top three coun­tries. You can see the im­por­tance of China in our over­all com­pany. It’s in­creas­ing very rapidly and that’s why we are in­vest­ing so much here.

How do you see the op­por­tu­ni­ties and chal­lenges for your com­pany amid the Chi­nese health­care re­form?

On the op­por­tu­nity side, the gov­ern­ment has rec­og­nized that new drugs don’t come to Chi­nese pa­tients as soon as they do to other coun­tries. For ex­am­ple, of all the drugs in­tro­duced since 2008, only 20 per­cent have come to China.

AndI­knowthat theChi­nese au­thor­i­ties are work­ing very hard to re­duce what we call the drug lag that pre­vents Chi­nese pa­tients from getting drugs sooner.

For ex­am­ple, they have in­creased the num­ber of re­view­ers so that all of the files can be ad­e­quately man­aged and ap­proved or not ap­proved de­pend­ing on the data. They also have an­nounced the pri­or­ity re­view process for break­through ther­a­pies, which is some­thing that other parts of the world also use, to speed up ac­cess of medicines for Chi­nese pa­tients. So I think they are moving in the right di­rec­tion in terms of in­crease speed of mar­ket ac­cess for Chi­nese pa­tients.

One of the ques­tions is how we can ex­pand in­sur­ance cov­er­age so that we can en­sure that not only all Chi­nese cit­i­zens have in­sur­ance for medicines but that they have them

You’ve spo­ken about biosim­i­lar and gener­ics. Could you ex­plain?

Biosim­i­lar is very im­por­tant to the future of the health­care sys­tems around the world be­cause bi­o­log­ics are very ex­pen­sive orig­i­na­tor drugs. And it’s not the same as a chem­i­cal. If you have a chem­i­cal, once a chem­i­cal goes generic, it’s very easy for gener­ics to launch. But in bi­o­log­ics, be­cause we use liv­ing cells to cre­ate the medicine, it’s much more dif­fi­cult to make gener­ics. So we have made a com­mit­ment to de­velop and launch gener­ics. We’ll have 10 fil­ings over the next three years for biosim­i­lars, which will help lower to­tal cost of the health­care sys­tem and free up funds so that more pa­tients can be served and there will be more room for other in­no­va­tive medicines that come.

Could you ex­plain your merg­ers and ac­qui­si­tions strat­egy?

We call our M&A ap­proach pre­ci­sion M&A in terms of what we did two years ago with GSK (Bri­tish drug­maker Glax­oSmithK­line Plc) and (the US phar­ma­ceu­ti­cal gi­ant) Eli Lilly & Co. Pre­ci­sion M&A is when you look at your port­fo­lio and what as­sets you want to keep and what as­sets you need to ei­ther sell or make stronger.

And then you also look at other com­pa­nies and go through the same ex­er­cise. And you try to find a match. We found a match in GSK. We wanted their on­col­ogy prod­ucts and they wanted our vac­cines prod­ucts. So we did what’s called a swap, where we swapped the as­sets and then we also formed a joint ven­ture of our over-the-counter drug busi­ness. We call it “pre­ci­sion” be­cause it goes in and iden­ti­fies those spe­cific as­sets in an­other com­pany that help strengthen our com­pany.

What is your man­age­ment style? Are you a tough man?

My job as the leader of the com­pany is to find the right people to run the busi­nesses, to agree on the ob­jec­tives and then to let them run the busi­ness.

So my style is, let’s get aligned up­front on what we are try­ing to ac­com­plish, let’s set tar­gets and then give the man­agers the au­ton­omy they need to de­liver those tar­gets. As long as ev­ery­thing goes well, then, there’s a lot of au­ton­omy.

If things don’t go well, then I will get very in­volved in the busi­ness and help them man­age it in a way that can get us back on track.

What are your hob­bies?

I like to do phys­i­cal fit­ness, go to the gy­mand stay healthy, try to clearmy mind. Work­ing out is one of my big hob­bies. I also love fly fish­ing. It’s pop­u­lar around the world, such as in Mon­tana where there are very beau­ti­ful big rivers and a lot of beau­ti­ful landscape.

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