We are very pleased to see more and more companies and websites picking up on our articles. Wall street journal and all of the osteoporosis drug makers come here and see what is happening in osteoporosis land. A recent Wall Street Journal article links to our page which we are very grateful of. We hope to improve this website with more relevant content for you. Below is the article which references the job-cuts article on Novartis from October.
Novartis, one of the leaders in the drug industry is shifting gears according to the article to maintain its strong position. This is an early sign that might be followed by other pharma and biotech companies. Since our blog pertains to osteoporosis treatment, we expect that some of the new therapies for osteoporosis could have difficulties getting approval. Pfizer is already delayed by more than 1 year for osteoporosis treatment with Oporia (a selective estrogen receptor modulator or SERM) and even received a non-approvable letter from the FDA much earlier.
We hope that new treatments will come through, both for all the patients out there as well as for the companies producing these high cost and high risk drug development programs. We are looking forward to Vivant, Denosumab and Odanacatib coming to the market place. However, if a drug for a smaller company like Amgen will not get approval it will be much more devastating than for a large pharma company like Novartis, which is much more diversified, and who can get some of their revenue stream through the non-prescription business.
Novartis Shakes Ranks as Earnings Flag
Management Swap, Job Cuts Aim to Cope With Shifts in Market
By JEANNE WHALEN and GORAN MIJUK
October 19, 2007; Page A14
Novartis AG, long one of the drug industry’s best performers, is shifting gears in an effort to adjust to the tough regulatory and sales climate facing Big Pharma.
VASELLA’S PLAN
• Strategy Shift: Novartis revealed a management shake-up and U.S. job cuts, and said it will lean more heavily on its nonprescription-drug businesses.
• Regulatory Hurdles: The moves come as Novartis and others say new-drug approvals have become harder to gain.
• Tough Environment: The shift marks the challenges Big Pharma faces from generic drugs and other pressures.
The Swiss drug maker yesterday revealed a management shake-up, a revamp of its pharmaceutical division and job cuts in the U.S. after several setbacks led to poor third-quarter earnings. Novartis Chief Executive Daniel Vasella said the changes are designed to help the company in a time of more aggressive competition from generic drugs and stricter safety standards at the Food and Drug Administration. Among other measures, Novartis expects to lean more heavily on its nonprescription-drug businesses to drive sales growth, he said.
The shift was disclosed on the same day Pfizer Inc. said it would pull an inhaled-insulin product, leading to a sharp drop in its third-quarter results, underscoring the challenges facing the industry as a whole. Generic versions of branded drugs are providing tough competition in a time of renewed efforts to damp medical costs, and new blockbuster drugs have been hard to come by.
![[Daniel Vasella]](http://online.wsj.com/public/resources/images/HC-GD296_Vasell_20051028180822.gif)
Other drug makers yesterday affirmed the market and regulatory difficulties. Also yesterday, drug maker Wyeth posted a slightly lower third-quarter profit. “This is an environment that has become harder,” said Bernard Poussot, Wyeth’s incoming chief executive, referring to his immediate priority of overcoming the company’s recent troubles winning FDA approval for its drugs. “We have to find ways to get these products approved. I think we can make a big difference to patients, and therefore it is our job to adapt to the circumstances.”
Eli Lilly & Co. yesterday reported a 6% rise in third-quarter net income, as cost cuts and rising sales of newer products offset higher marketing and administrative expenses.
Novartis, of Basel, Switzerland, said the heads of its prescription-drug and consumer-health-care units are swapping jobs “to expand management experience and provide fresh impetus.”
Joe Jimenez, who joined the company in April as head of consumer health care, will take over the prescription-drug unit and carry out a reorganization aimed at simplifying decision making and pushing more medicines through to market, Novartis said. He also will oversee a cut of 1,260 jobs in the U.S. in an effort to save $230 million annually. Novartis will cut 750 jobs within the company and stop using 510 sales representatives from third parties.
![[Ebeling Thomas]](http://online.wsj.com/public/resources/images/HC-FA434_Thomas_20071019091504.gif)
Mr. Jimenez joined Novartis in April from Blackstone Group LP, the private-equity firm. He was previously on the board of AstraZeneca PLC and was an executive running H.J. Heinz Co.’s businesses in the U.S. and Europe.
The company said it also is establishing a unit called Novartis Biologics to focus more closely on developing biological medicines, an area big drug companies are rushing to master. Biological drugs make up 25% of the products in Novartis’s pipeline and “are increasingly a priority in R&D activities,” Novartis said.
Thomas Ebeling, who had run the prescription-drug business, will take over as head of consumer health care, which includes nonprescription drugs, medications for animals and contact lenses. The unit, along with the vaccines and diagnostics business and the generic-drug business, will become increasingly important to Novartis, Dr. Vasella said. “We want to accelerate the growth of the nonpharma businesses,” he told analysts on a conference call.
Several setbacks in the U.S. have tarnished the company’s performance. Sales of irritable-bowel-syndrome drug Zelnorm have plummeted 80% this year after the company withdrew the drug from the market in March at the request of the FDA, which was concerned about a possible link to angina, heart attacks and strokes. Several other drugs were hit by generic competition: Lamisil for nail-fungus infections, Lotrel for hypertension and Famvir for viral infections. Novartis also had expected to start selling the diabetes drug Galvus this year, but the FDA has declined to approve it.
The company said third-quarter net profit jumped to $6.87 billion from $1.87 billion a year earlier, helped by a $5.3 billion gain from the sale of its Gerber baby-food and medical-nutrition businesses to Nestlé SA. Excluding asset sales, profit fell 12% to $1.57 billion.
Overall sales rose by 9% to $9.61 billion, boosted by a gain from Novartis’s budding vaccine and diagnostics business and strong sales of drugs such as blood-pressure medication Diovan, leukemia medicine Gleevec and breast-cancer drug Femara.
Wyeth, of Madison, N.J., said sales of the company’s top-selling drug, the antidepressant Effexor, rose 4% to $958 million. Effexor is facing some generic competition for certain formulations. Sales for Wyeth’s second best-selling product, the pneumococcal vaccine Prevnar, increased 24% to $634 million.
![[Novartis]](http://online.wsj.com/public/resources/images/NA-AO292_NOVART_20071018185407.gif)
According to a note by analysts at Bear Stearns Cos., sales of Effexor were expected to come in at $937 million, while Prevnar sales were seen as hitting $652 million.
Wyeth posted net income of $1.15 billion, or 84 cents a share, weighed down by restructuring charges, compared with year-earlier profit of $1.16 billion, or 85 cents a share. Sales jumped 9% to $5.62 billion, but revenue from the blockbuster acid-reflux drug Protonix dropped 6% in part because of the possibility that a generic-drug maker might launch a version of that drug soon. Wyeth said it hasn’t seen any signs that such a launch has taken place thus far.
Lilly, of Indianapolis, raised its full-year earnings forecast. The company expects 2007 per-share pro-forma adjusted earnings of $3.50 to $3.55.
The company reported net income of $926.3 million, or 85 cents a share, compared with $873.6 million, or 80 cents a share, a year earlier. The latest results included a charge of six cents a share for insurance recoveries. Revenue rose 19% to $4.59 billion.
Sales of Lilly’s best seller, the antipsychotic Zyprexa, rose 8%, with U.S. sales up 4% and international sales gaining 11%. Its sales have been hurt recently by reports that it could trigger diabetes and unusual weight gain. Lilly expects modest growth in worldwide Zyprexa sales for 2007.
Lilly’s antidepressant Cymbalta had a sales jump of 47% to $513.2 million, as U.S. sales climbed 45% and international sales rose 64% mainly because of strong demand.
–Sarah Rubenstein, Val Brickates Kennedy and Mike Barris contributed to this article.
Write to Jeanne Whalen at jeanne.whalen@wsj.com and Goran Mijuk at goran.mijuk@dowjones.com
RELATED ARTICLES AND BLOGS
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Related Articles from the Online Journal
• U.S. Unlikely To Approve Novartis Drug
• Pfizer’s Net Falls 77% on Exit Of Exubera, Generic Competition
• J&J Posts Decline in Profit Amid Restructuring Charge
• Honeywell Boosts Guidance Again Amid Strong Aerospace Growth
Blog Posts About This Topic
• J&Jâs Drug Biz Struggles blogs.wsj.com
• Novartis cuts 1,260 U.S. jobs osteoporosisblogger.com
We are very pleased to see more and more companies and websites picking up on our articles. Wall street journal and all of the osteoporosis drug makers come here and see what is happening in osteoporosis land. A recent Wall Street Journal article links to our page which we are very grateful of. We hope to improve this website with more relevant content for you. Below is the article which references the job-cuts article on Novartis from October.
Novartis, one of the leaders in the drug industry is shifting gears according to the article to maintain its strong position. This is an early sign that might be followed by other pharma and biotech companies. Since our blog pertains to osteoporosis treatment, we expect that some of the new therapies for osteoporosis could have difficulties getting approval. Pfizer is already delayed by more than 1 year for osteoporosis treatment with Oporia (a selective estrogen receptor modulator or SERM) and even received a non-approvable letter from the FDA much earlier.
We hope that new treatments will come through, both for all the patients out there as well as for the companies producing these high cost and high risk drug development programs. We are looking forward to Vivant, Denosumab and Odanacatib coming to the market place. However, if a drug for a smaller company like Amgen will not get approval it will be much more devastating than for a large pharma company like Novartis, which is much more diversified, and who can get some of their revenue stream through the non-prescription business.
Novartis Shakes Ranks as Earnings Flag
Management Swap, Job Cuts Aim to Cope With Shifts in Market
By JEANNE WHALEN and GORAN MIJUK
October 19, 2007; Page A14
Novartis AG, long one of the drug industry’s best performers, is shifting gears in an effort to adjust to the tough regulatory and sales climate facing Big Pharma.
VASELLA’S PLAN
• Strategy Shift: Novartis revealed a management shake-up and U.S. job cuts, and said it will lean more heavily on its nonprescription-drug businesses.
• Regulatory Hurdles: The moves come as Novartis and others say new-drug approvals have become harder to gain.
• Tough Environment: The shift marks the challenges Big Pharma faces from generic drugs and other pressures.
The Swiss drug maker yesterday revealed a management shake-up, a revamp of its pharmaceutical division and job cuts in the U.S. after several setbacks led to poor third-quarter earnings. Novartis Chief Executive Daniel Vasella said the changes are designed to help the company in a time of more aggressive competition from generic drugs and stricter safety standards at the Food and Drug Administration. Among other measures, Novartis expects to lean more heavily on its nonprescription-drug businesses to drive sales growth, he said.
The shift was disclosed on the same day Pfizer Inc. said it would pull an inhaled-insulin product, leading to a sharp drop in its third-quarter results, underscoring the challenges facing the industry as a whole. Generic versions of branded drugs are providing tough competition in a time of renewed efforts to damp medical costs, and new blockbuster drugs have been hard to come by.
Other drug makers yesterday affirmed the market and regulatory difficulties. Also yesterday, drug maker Wyeth posted a slightly lower third-quarter profit. “This is an environment that has become harder,” said Bernard Poussot, Wyeth’s incoming chief executive, referring to his immediate priority of overcoming the company’s recent troubles winning FDA approval for its drugs. “We have to find ways to get these products approved. I think we can make a big difference to patients, and therefore it is our job to adapt to the circumstances.”
Eli Lilly & Co. yesterday reported a 6% rise in third-quarter net income, as cost cuts and rising sales of newer products offset higher marketing and administrative expenses.
Novartis, of Basel, Switzerland, said the heads of its prescription-drug and consumer-health-care units are swapping jobs “to expand management experience and provide fresh impetus.”
Joe Jimenez, who joined the company in April as head of consumer health care, will take over the prescription-drug unit and carry out a reorganization aimed at simplifying decision making and pushing more medicines through to market, Novartis said. He also will oversee a cut of 1,260 jobs in the U.S. in an effort to save $230 million annually. Novartis will cut 750 jobs within the company and stop using 510 sales representatives from third parties.
Mr. Jimenez joined Novartis in April from Blackstone Group LP, the private-equity firm. He was previously on the board of AstraZeneca PLC and was an executive running H.J. Heinz Co.’s businesses in the U.S. and Europe.
The company said it also is establishing a unit called Novartis Biologics to focus more closely on developing biological medicines, an area big drug companies are rushing to master. Biological drugs make up 25% of the products in Novartis’s pipeline and “are increasingly a priority in R&D activities,” Novartis said.
Thomas Ebeling, who had run the prescription-drug business, will take over as head of consumer health care, which includes nonprescription drugs, medications for animals and contact lenses. The unit, along with the vaccines and diagnostics business and the generic-drug business, will become increasingly important to Novartis, Dr. Vasella said. “We want to accelerate the growth of the nonpharma businesses,” he told analysts on a conference call.
Several setbacks in the U.S. have tarnished the company’s performance. Sales of irritable-bowel-syndrome drug Zelnorm have plummeted 80% this year after the company withdrew the drug from the market in March at the request of the FDA, which was concerned about a possible link to angina, heart attacks and strokes. Several other drugs were hit by generic competition: Lamisil for nail-fungus infections, Lotrel for hypertension and Famvir for viral infections. Novartis also had expected to start selling the diabetes drug Galvus this year, but the FDA has declined to approve it.
The company said third-quarter net profit jumped to $6.87 billion from $1.87 billion a year earlier, helped by a $5.3 billion gain from the sale of its Gerber baby-food and medical-nutrition businesses to Nestlé SA. Excluding asset sales, profit fell 12% to $1.57 billion.
Overall sales rose by 9% to $9.61 billion, boosted by a gain from Novartis’s budding vaccine and diagnostics business and strong sales of drugs such as blood-pressure medication Diovan, leukemia medicine Gleevec and breast-cancer drug Femara.
Wyeth, of Madison, N.J., said sales of the company’s top-selling drug, the antidepressant Effexor, rose 4% to $958 million. Effexor is facing some generic competition for certain formulations. Sales for Wyeth’s second best-selling product, the pneumococcal vaccine Prevnar, increased 24% to $634 million.
According to a note by analysts at Bear Stearns Cos., sales of Effexor were expected to come in at $937 million, while Prevnar sales were seen as hitting $652 million.
Wyeth posted net income of $1.15 billion, or 84 cents a share, weighed down by restructuring charges, compared with year-earlier profit of $1.16 billion, or 85 cents a share. Sales jumped 9% to $5.62 billion, but revenue from the blockbuster acid-reflux drug Protonix dropped 6% in part because of the possibility that a generic-drug maker might launch a version of that drug soon. Wyeth said it hasn’t seen any signs that such a launch has taken place thus far.
Lilly, of Indianapolis, raised its full-year earnings forecast. The company expects 2007 per-share pro-forma adjusted earnings of $3.50 to $3.55.
The company reported net income of $926.3 million, or 85 cents a share, compared with $873.6 million, or 80 cents a share, a year earlier. The latest results included a charge of six cents a share for insurance recoveries. Revenue rose 19% to $4.59 billion.
Sales of Lilly’s best seller, the antipsychotic Zyprexa, rose 8%, with U.S. sales up 4% and international sales gaining 11%. Its sales have been hurt recently by reports that it could trigger diabetes and unusual weight gain. Lilly expects modest growth in worldwide Zyprexa sales for 2007.
Lilly’s antidepressant Cymbalta had a sales jump of 47% to $513.2 million, as U.S. sales climbed 45% and international sales rose 64% mainly because of strong demand.
–Sarah Rubenstein, Val Brickates Kennedy and Mike Barris contributed to this article.
Write to Jeanne Whalen at jeanne.whalen@wsj.com and Goran Mijuk at goran.mijuk@dowjones.com
RELATED ARTICLES AND BLOGS
Related Content may require a subscription | Subscribe Now — Get 2 Weeks FREE
Related Articles from the Online Journal
• U.S. Unlikely To Approve Novartis Drug
• Pfizer’s Net Falls 77% on Exit Of Exubera, Generic Competition
• J&J Posts Decline in Profit Amid Restructuring Charge
• Honeywell Boosts Guidance Again Amid Strong Aerospace Growth
Blog Posts About This Topic
• J&Jâs Drug Biz Struggles blogs.wsj.com
• Novartis cuts 1,260 U.S. jobs osteoporosisblogger.com
October 19, 2007; Page A14
Osteoporosis tops the list of important public health concerns because of the significant morbidity and mortality associated with osteoporotic fracture-specifically, hip fractures. 