Commercial Outcomes – Novartis

Novartis to Spin-Off Eye Care Device Business

Swiss pharmaceutical major, Novartis, has announced it plan to spin-off Alcon, its eye care division, into a separately-traded standalone company.

The company has sought shareholder approval for 100% spinoff of Alcon, its eye care device business and also initiated share buyback of up to USD 5 billion by the end of 2019. It will be mostly funded by the proceeds of its divestment to GlaxoSmithKline of their consumer health joint venture stake. The details of the transaction and its proposed valuation remain opaque.

Novartis has kept the eye drug products to itself, with Alcon handling more equipment and consumer products for eye care. When it was originally acquired, Alcon’s business was surgical equipment, eye drugs and products such as contact lenses and eye drops. The drugs have been shifted to Novartis’s pharmaceuticals unit and will stay there after the spin-off. After the spin-off, the current chief executive officer Mike Ball will be chairman and David Endicott, Alcon’s chief operating officer, will become the new chief executive officer. Alcon would be incorporated in Switzerland; with Fort Worth continuing to be a key location. The listings are planned on SIX Swiss Exchange and New York Stock Exchange.

Pfizer Rolls Back Drug Price Hikes After Trump Intervenes

In a latest development, the American drug major, Pfizer, has agreed to roll-back its upward revised prices, effective from July 1, 2018, to the earlier rates after the US President, Donald Trump, had personally intervened into the matter. Novartis.

Concerned over the impacts of the higher drug prices, the US President had a one-to-one meeting with the Pfizer CEO and conceived the latter to pull back the drug prices to the pre-revised rates. Following the meeting, the company announced that the prices will be restored to the pre-July 1, 2018 rates until Trump puts in place a new healthcare policy or until the end of the current year, whichever comes first. Novartis.

Despite stiff opposition by the public as well lawmakers in the US, the company had raised the prices of its 100 drugs with effect from July 1, 2018. However, Pfizer was not the only drug company implementing price hikes; Teva, Bayer, Acella, Acorda Therapeutics and Intercept also have recently lifted their drug prices citing escalating production costs.

Takeda Mulls Selling Osaka Headquarters to Fund $62B Shire Buyout

Takeda, is taking on a huge debt load to make the $62 billion Shire acquisition happen. It is looking to fill some of the financial gap by selling its old headquarters in Osaka, Japan. It plans to take bids through October and sell the former headquarters and surrounding buildings by the end of the year. It hopes to collect around 60 billion yen ($542 million). In May,

Takeda finalized the Shire offer and secured a bridge loan of up to $30.85 billion to help fund the cash proportion of the deal. Takeda’s CEO Christophe Weber has been pitching the deal as part of Takeda’s ambitious global expansion. As Takeda mobilized its M&A to gain new products, it has also been cutting some operations. After its major R&D rejig announced in 2016, it has divested drug development activities for the U.S. and European markets to PRA Health Sciences, and the two then formed a joint venture for that function in Japan. As for its real estate properties, it sold two buildings in Tokyo last December, including its former Tokyo headquarters, for 49.5 billion yen ($448 million).

FDA and Trump Administration Mull Drug Imports to Counter Price Hikes

The FDA is considering a change in its policy that would allow imports of certain drugs into the US aimed at lowering the prices for consumers. Currently, it is illegal to purchase drugs from overseas, where many medications are available at much lower prices than in the US. Gottlieb says any change in policy to allow drug imports would be temporary until adequate competition levels out prices in the US. Remarkably, on the same day Gottlieb raised the possibility of importing lower priced drugs into the US, pharmaceutical giant Merck had announced that it would limit price increases for several treatments. The company said it is lowering the price of Zepatier by 60%, and several other medicines by 10% to reduce out-of-pocket costs for patients. Earlier, both Pfizer and Novartis announced they would freeze prices, after coming under a Twitter barrage from President Trump.

FDA Issues New Biosimilar Action Plan (BAP) to Modernize Regulatory Approval Process for Biosimilars, Aims Acceleration in Innovation

On July 18, 2018, the FDA released its Biosimilars Action Plan (BAP) for balancing innovation and competition. The BAP marks an important effort by the apex drug regulatory body to bolster what Commissioner Gottlieb has characterized as an anemic biosimilar market in the United States.

The BAP has four “Key Elements”:

(1) Improving the efficiency of the biosimilar and interchangeable product development and approval process

(2) Maximizing scientific and regulatory clarity for the biosimilar product development community

(3) Developing effective communications to improve understanding of biosimilars among patients, clinicians, and payors

(4) Supporting market competition by reducing gaming of FDA requirements or other attempts to unfairly delay competition

Takeda Sees China Drug Market as Next Big Opportunity After Shire Deal

The Chinese biopharma market is booming as more and more companies eye breaking into that rich market. Christophe Weber, CEO of Takeda, views its China programs as its second-biggest business behind the United States. Coming off its $62 billion acquisition of Shire, Weber and Takeda are planning to sell seven new drugs in China over the next five years. Takeda is banking on winning regulatory approval in China for some of the new medications that it gained in the deal. The company is working on reimbursement programs in China for those drugs. Calling it a “big, big shift” in strategy, Weber said that Takeda’s goal is to launch their medications in China at the same rate as they attempt in their other markets, including the U.S. and Europe. Takeda now regards China as a core country to its business practice.