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Novartis CEO Jimenez focuses R&D on the new blockbuster paradigm

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Novartis CEO Joseph Jimenez

For many pharma companies like, say, Eli Lilly, the focus in R&D has been taking the big bats and swinging for the proverbial fences, looking for breakthrough drugs that can instantly command billions in annual revenue. That strategy has been on display for Alzheimer's as well as heart drugs, where Lilly has been pursuing questionable scientific strategies in search of the golden blockbuster ticket.

Novartis ($NVS) CEO Joe Jimenez, though, has been pursuing a different path to the same goal.   

"The definition of a blockbuster is changing," Jimenez tells Fortune magazine. In part, he sees that as a natural outcome of new pressures in U.S. health reform which makes it difficult to obtain reimbursement for new drugs that can't clearly outperform standard therapies. So the blockbuster strategy at Novartis is to look for new drugs that offer multiple niche approvals that add up to blockbuster status--a billion dollars or better per year.  

Longtime observers will note that Novartis' Jimenez is not talking about anything new here. The company's work in the cancer field has long relied on nabbing an initial approval for a narrow indication and then adding new approvals as the research team builds up data on their new drugs. As an R&D field, cancer is also the kind of disease arena that best serves this kind of approach, as various types of cancer will often respond to the same therapeutic.

In this sense Novartis can be seen following Genentech, which has made the pursuit of biologic pathways into an art form. And a variety of companies will continue to pursue the same approach in their own way. The keen focus on personalized medicines--carefully targeted and tied to diagnostics that can identify the patients most likely to respond--is also driving other R&D groups in exactly the same direction. 

As big companies like Lilly ($LLY) roll behind the 8 ball of generic competition, though, the need for breakthrough blockbusters that can tap mega-blockbuster returns will grow even greater. But the odds against success will remain daunting.  

- here's the article from Fortune

Special Reports: Novartis - The Biggest R&D Spenders In Biopharma | Joseph Jimenez - The 25 most influential people in biopharma today - 2012

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