A closer look at Novartis’ new CEO
Earlier this month, we reported that Novartis’ CEO Joe Jimenez was standing down, to be replaced by the company’s global head of drug development, Vas Narasimhan. He won’t begin in his new role until February next year, but Narasimhan’s appointment could signal a change of direction for the Swiss drug-maker. Because, while Jimenez was a businessman first and foremost, Narasimhan is a doctor.
Novartis’ share price has appreciated by 18% so far this year
SOURCE: Yahoo Finance
According to Bartjan van Hulten, founder of healthcare investment firm Medex Capital Ltd, the incoming CEO “suggests the company is going to really focus on the drug and innovation part of the business,” as he is “a specialist in the field,” unlike Jimenez, who van Hulten describes as “the Heinz man” (a reference to Jimenez’s former position as head of H. J. Heinz Co. in North America, then Europe).
It is certainly true that Narasimhan is a specialist. He holds a medical degree from Harvard and has been chief of Novartis’ drug development for a number of years. However, on of his first challenges will have less to do with drugs and more to do with eye care. Novartis has courted a great deal of success under Jimenez, but Alcon, a maker of contact lenses and surgical equipment, remains a drag on the company’s performance.
Beyond that, there is little doubt that drug innovation is what Novartis do best, and what the company should focus on. Narasimhan agrees. On Monday, he told reporters on a call that “Our goal will be to continue to drive that innovation agenda in a new world where there’s so many more possibilities with new science, data and digital,” and that the company will continue to try to “translate that innovation into commercial success.”
Dominion holds Novartis in its Global Trends Managed Fund.
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