Billions of drugs under pressure: why is pharmaceutical giant Novartis shaking?

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Novartis boss Vas Narasimhan (46) has to surrender. Uncertainties about the future of subsidiary Sandoz and bad luck in the drug pipeline have increased the pressure on the senior executive in recent months. The better-than-expected half-year figures on Tuesday came in handy for him. Revenue for first six months: $26.6 billion – five percent annual increase.

Narasimhan, on the other hand, doubled and raised his year targets. The American now expects sales growth of almost ten percent. The announcement of another share repurchase program also made the heart beat of shareholders. Novartis’ stock rose sharply on Tuesday – a salvation for Narasimhan?

Maybe. If it weren’t for the dark clouds on the patent front of drugs that have made billions to date. The main growth drivers are the heart drug Entresto, the cancer treatments Pluvicto and Kisqali, and the MS drug Kespta.

But above all, the billions worth of Entresto medicine must now give Narasimhan a headache. A few days ago, the U.S. District Court in Delaware declared invalid a key heart medicine patent. “We will appeal because we think we can win with our arguments,” Narasimhan said at yesterday’s press conference.

But the patents of the bestselling Cosentyx are also in danger of expiring. Novartis will try to defend itself through legal means as best it can. With the protections for Entresto and Cosentyx removed, generic drug manufacturers are poised to conquer the multi-billion dollar market. With the latest court decision, things are likely to happen sooner than expected.

Medi pipeline projects canceled

That’s why Narasimhan needs new billion-dollar Medis to deliver on his growth promises and secure his place at the top of the group. That’s why in recent years the pharmaceutical giant has been busy buying small pharma companies and pharmaceuticals to bring new products to market. This year, however, Novartis’ boss had to cancel multiple projects to develop new drugs from his own kitchen. Novartis now runs only 136 projects instead of the original 150.

The company at the knee of the Rhine is not alone in this. Some pharmaceutical giants rolled out the red pen this year. The reason for the development is the new regulations in the USA and Europe. The most important market, the United States, wants to force big drugs to cut costs and raise barriers to new drugs.

It remains to be seen whether the remaining 136 potential drugs currently being tested in studies will be as successful as Entresto. And so Novartis boss Narasimhan continues to be under pressure to succeed.

Source :Blick