Novartis has slimmed down its clinical-stage programs by nearly 40% in recent years as the Big Pharma “took to heart” data showing it wasn’t getting good value from its medicines, CEO Vas Narasimhan, M.D., told investors.
Kicking off the Swiss company’s annual Meet Novartis Management event in London Thursday morning, Narasimhan said he “wanted to say a word about our R&D transformation and how that's actually having an impact on how we invest in the business.”
“Over the last three years, we've done a lot of work to focus the R&D organization,” he told attendees. “You all know well that the historical data shows that Novartis has been pretty consistent as a leader in the number of drugs that are approved, but rarely in the top quartile or top half in the value of those medicines. We took that data to heart and really wanted to rethink how we approach our pipeline.”
“So we made a significant, nearly 40%, reduction in the number of clinical-stage projects in the portfolio,” he added.
Novartis took a similar approach to earlier-stage research, with teams ordered to be “much more disciplined about … focusing on high-value medicines.”
“What that means is more chemists, more biologists, more expertise on each one of those assets to hopefully get them to move much quicker to the clinic,” he added.
That doesn’t mean Novartis has been afraid to splash the cash in areas where it hopes to see a significant payoff. The company has committed more than $400 million for so-called “technical development,” Narasimhan said.
“This is primarily new capabilities in radioligand therapies, RNA therapeutics, cell and gene therapeutics and novel format biologics—so bispecifics, trispecifics, or biologics tied to another agent [like an antisense oligonucleotide] or an siRNA,” Narasimhan explained.
When it comes to clinical trials, the company is trying to find ways to “go faster, especially given the arms race we're in with our peers to really get these trials fully enrolled,” he added.
To this end, Chief Medical Officer Shreeram Aradhye, M.D., has been tasked with ensuring “we close the gap in terms of either being at median or better than median over time in terms of our average clinical trial execution,” Varasimhan said.
Next year, Novartis is expecting to see atrasentan approved for immunoglobulin A nephropathy, while submitting remibrutinib for approval to treat chronic spontaneous urticaria. At the same time, the company will continue to “scour the biotech space” for any new opportunities.
When it comes to what would make for a potential acquisition, Narasimhan pointed out that the company has “signed 30 strategic deals in the last two years.” Not all of these deals have had high visibility, as they are often in the “exploratory, preclinical space, either getting new technologies or better covering targets that we need to cover.”
“When we can find them, of course, we want clinical-stage assets,” he added. But these are “harder to find” due to “tougher” valuations.