SHARE
COPY LINK

DRUGS

Former Novartis chief stays on company payroll

A bonanza payout to the former chairman of Novartis has been cut back radically, the pharmaceutical group said on Wednesday, reporting also a fall in second quarter profit.

Former Novartis chief stays on company payroll
Daniel Vasella. Sebastian Bozon/AFP/File

The golden handshake was to have totalled 72 million francs ($77 million), but the size of the payout caused uproar in Switzerland.
   
Now the former chairman Daniel Vasella will receive 2.7 million Swiss francs in cash, and shares worth about 2.2 million francs, for services during the transition period since he left in February this year.
   
The total amount is about one fifteenth of what he would have received.

However, he is to continue acting as a consultant for the firm at a high daily fee.
   
When details of the initial bonanza deal leaked out there was an outcry in Switzerland.
   
Vasella announced that he would forgo the sum, but he became the unwilling poster boy for campaigners behind a popular vote in Switzerland to rein in executive pay.
   
The former chairman who took home a 15-million-franc salary in 2011.
   
Novartis said he would continue providing consulting services to the company, receiving $25,000 (33,000 euros) per day, with an annual guaranteed minimum fee of $250,000 between 2014 and 2016.
   
"We are pleased that we will be able to call on Daniel Vasella's services and to have the opportunity to benefit from his knowledge and long-term experience in shaping a global healthcare leader," Novartis Chairman ad interim Ulrich Lehner said in a statement.
   
Separately on Wednesday, Novartis posted lower net profit for its second quarter but raised its full-year outlook.
   
During the April-June period, the company saw its net profit tick in at $2.55 billion, down five percent from the year-ago quarter, on sales up one percent at $14.49 billion.
   
Analysts polled by financial agency AWP had expected the company's sales to come in slightly lower, at $14.35 billion, and were positively surprised by a hike in outlook.
   
"We have raised our outlook for 2013 performance to reflect a smaller impact from generic competition," Novartis said, adding it now expects full-year net sales to grow slightly instead of remaining flat.
   
It said it now expected competition from generic drugs to impact its annual results by up to $2.7 billion, instead of the $3.5 billion previously anticipated, mainly due to a delay in the launch of a generic drug in the United States to compete with its Diovan monotherapy to counter high blood pressure.
   
The company cautioned, however, that the trend would likely reverse next year, when a generic Diovan monotherapy drug is expected to launch in the US.
   
Following the two announcements, Novartis saw its share price slip 1.45 percent to 68.10 francs a piece in late morning trading, as the Swiss stock exchange's main index dropped just 0.88 percent.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

NOVARTIS

Switzerland’s Novartis to help make Pfizer-BioNTech Covid vaccine

Swiss pharmaceuticals giant Novartis said Friday it had signed an initial agreement to help produce the Pfizer-BioNTech vaccine against Covid-19, as countries scramble to boost supplies.

Switzerland's Novartis to help make Pfizer-BioNTech Covid vaccine
Novartis will help manufacture Pfizer vaccine. Photo by AFP.

The rare act of cooperation — in an industry usually marked by cut-throat competition — comes after French pharma group Sanofi announced earlier this week that it would also team up with rivals Pfizer and BioNTech to help produce 125 million doses of their jab.

The two-dose vaccine, which is based on mRNA technology, has been shown to be around 95 percent effective and has been approved for use by the World Health Organization and in some 50 countries.

But it is in limited supply as nations around the world race to immunise their populations against the coronavirus, which has killed nearly 2.2 million people in just over a year.

Novartis said in a statement that it would use its sterilised manufacturing facilities at its site in Stein, Switzerland to help produce the Pfizer-BioNTech jabs.

Under the agreement, the company said it would “take bulk mRNA active ingredient from BioNTech and fill this into vials under aseptic conditions for shipment back to BioNTech for their distribution to healthcare system customers around the world”.

Once a final agreement is reached, Novartis said it expected to begin production in the second quarter of the year, with initial shipment of finished product expected in the third quarter.

Steffen Lang, Head of Novartis Technical Operations, stressed that the company was “committed to leverage our manufacturing capabilities to help support the supply of COVID-19 vaccines and therapeutics around the world”.

“We expect this to be the first of a number of such agreements,” he said in the statement.

Novartis said it was already in “advanced discussions” with a number of other companies about with other production tasks, including of mRNA, therapeutic protein and raw material production for Covid vaccines and therapeutics. 

SHOW COMMENTS