What is Novartis doing here? It’s seen by many analysts as the safest European biopharma company going right now and is consistently one of the biggest R&D spenders in the industry. It has a strong pipeline and is competing to be one of the first to market a new approach to treating cancer, known as CAR-T. Surely, it’s as ripe as can be?
This is all true, but there is something rotten in the state of Switzerland that has seen this Big Pharma hemorrhage executive and scientific talent in 2016—while also cutting down on the very cutting-edge science it’s battling to be the first to market.
Top execs David Epstein, Usman “Oz” Azam, Alessandro Riva and Hugh O'Dowd all exited last year and ended up at VC firm Flagship, CEO at Tmunity Therapeutics, head of oncology at Gilead, and chief of Fierce 15 winner Neon Therapeutics, respectively.
First, Epstein was culled after Novartis decided to split its pharma unit into two, focusing on pharmaceuticals and cancer units, which left no room at the inn for the division head and Novartis vet. In January, he announced that he had joined the venture capital firm Flagship to help run early-stage biotechs.
His departure came as a shock to the bio world as Epstein was highly regarded and, alongside former head of Novartis Oncology Hervé Hoppenot (who left in 2014 to run Incyte) and Azam, was pivotal in championing and nurturing the gene and cell therapy unit for the Swiss major.
This unit, however, also got hit by a downsize in 2016 when Novartis said that it would redeploy most of those 400 employees from the unit, with around 120 set for the ax. The move came only two years after the unit was formally created.
There is some confusion here: It looked as if Novartis was cutting back on research in this area, but CAR-T, the next-gen cancer class, is still a major focus for the Big Pharma, which is currently locked in a battle with biotech Kite Pharma to be the first to bring a CAR-T med to market in the U.S.
But the cuts to researchers and the leaving of execs continued, as later in the year Azam also jumped ship, becoming the chief at T cell biotech Tmunity in December—meaning the three key management players for the unit all upped and left by the end of 2016 as they looked to biotech for their future.
Hugh O’Dowd, formerly the head of global strategy of Novartis Oncology, also exited the company last year to move over to biotech startup Neon in September after around 20 years at the Big Pharma.
And there was another major departure in the form of Riva, a man who Epstein had hired at Novartis around 12 years ago. Riva left the company after working in its cancer unit, where he was global head of the oncology development department, to go work for Gilead’s cancer unit (which has its own problems), in January this year.
Epstein told FierceBiotech in an interview at the start of this year that Riva had been at Novartis for a long time and Gilead had offered him a good package, so it seemed logical for him to move. But he also said, in light of the cell and gene therapy unit cuts and departures: “I am a believer in cell therapy. These products will most certainly save lives. Based upon what I have seen, I recommend the industry remain optimistic.”
Novartis is clearly a strong, R&D-led company, but it gains a dishonorable mention (though not a full rotten award) given the loss of some serious talent in such a short period of time.
This also raises the question about just how strongly and passionately Big Pharma is about internal R&D projects, and how motivated the top brass feels in keeping its leading research lights when considering a strategy change, when they hear the siren call of biotech.