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How Vasant ‘Vas’ Narasimhan is readying India to play an even bigger function in its medicines pipeline as the corporate turns into a pure-play progressive agency
Image: Mexy Xavier
In the world of massive pharma, Vasant ‘Vas’ Narasimhan is most definitely an exception.
The son of Indian immigrants and a physician by coaching, Narasimhan is the one CEO of Indian origin among the many world’s high 20 pharmaceutical corporations by income. He has additionally had an extended tenure on the helm of an enormous pharmaceutical firm and at 47, makes him the youngest amongst his friends.
But, extra importantly, Narasimhan can be the one one amongst his compatriots who comes from a analysis and growth (R&D) background within the sector. That’s exactly why since he took cost of the $210 billion Switzerland-based Novartis seven years in the past, Narasimhan has pivoted the corporate from a diversified conglomerate with pursuits in eye wears, generic medicines and shopper medicines right into a pure-play progressive medicines firm.
That has meant a pointy concentrate on 5 therapeutic areas, with a slew of medicines and know-how platforms supposed to drive development within the coming a long time. Novartis, which as soon as had as many as seven completely different arms, at present operates a single arm, with the final of its subsidiaries, a generic enterprise firm, being offered off in October final yr.
“Sector-wide, there’s been a recognition that it’s difficult to allocate capital efficiently across different segments of health care and fully invest in the R&D opportunity within innovative medicines,” Narasimhan tells Forbes India throughout an interplay in Hyderabad.
Narasimhan’s visits to India, which have now grow to be an annual affair, spotlight Novartis’s ambitions to show the world’s fastest-growing massive financial system into its hub for innovation, with the whole lot from synthetic intelligence and information science and basic analysis being carried out from its facility in Hyderabad. In all, the corporate employs as many as 8,300 associates in India and is among the three main international growth websites for Novartis. Hyderabad can be one of many three main websites for biomedical analysis and of the 8,300 related, as many as 3,000 are in what the corporate calls cutting-edge applied sciences.
“The one area that historically we did not have in India was on the basic science research,” Narasimhan says. “I think it’s pretty broadly recognised that India has not been a leader. But we’ve now decided to start doing that as well.” In March, Narasimhan introduced a plan to convey elements of its analysis footprint to India, which incorporates basic analysis resembling chemistry and pharmacokinetic (PK) analysis. PK is the examine of how the physique interacts with administered substances.
“The talent now is at a level where we think we can do that successfully,” Narasimhan says. “Then the question, of course, is at what point could you bring discovery sciences, which is real fundamental research. But it’s a start to even bring PK sciences and chemical sciences into the country. And then, we’ll build from there hopefully over time.”
Still, the concentrate on innovating from India is placing, contemplating Novartis’s chequered previous with the nation. In 2013, in a landmark judgment that despatched shockwaves throughout pharmaceutical corporations globally, India’s Supreme Court rejected Novartis’s try and patent its anticancer drug Gleevec (imatinib mesylate), because it was fairly much like its earlier model. At that point, the corporate had mentioned that the judgment limits mental property safety and discourages future innovation in India.
“We moved from a world where first, it was all about cost arbitrage 15-20 years ago… that’s no longer the case,” Narasimhan says concerning the function India is enjoying presently. “Then it moved into business process outsourcing and capability centres. Now the hope is, can it (India operations) be a catalyst for transformation?”
“India is a perfect country for talents in basic and applied science with its large population, well-established education system and continuous supply of well-trained scientists in the market,” says Mahmud Hassan, director on the Blanche and Irwin Lerner Center for the Study of Pharmaceutical Management Issues at Rutgers Business School. “Narasimhan has made the right decision to look into India for those roles at Novartis.”
Building from India
In some ways, the elevated concentrate on India can be a end result of the transformation underway at Novartis below Narasimhan, who’s making an attempt to slim down the corporate to focus solely on growing progressive medicines. That was additionally the imaginative and prescient he had set ahead whereas being interviewed for the highest job at Novartis. Narasimhan joined Novartis in 2005, after a stint with McKinsey as the worldwide head of illness space methods at Novartis Pharmaceuticals.
“I worked in vaccines and diagnostics. I worked in generics, and I worked in innovative medicines. I had worked in three of the (at that time) seven divisions,” Narasimhan says. “When I came back to Novartis Pharmaceuticals as the head of product development, it struck me that what we were great at is discovering, developing and commercialising novel medicines. So, I had already had it in my mind that focusing on this was going to be our future.”
Then, as he grew to become chief medical officer and international head of drug growth, a job he held earlier than shifting as much as the nook room, the worldwide pharmaceutical business was witnessing the success of latest know-how platforms resembling cell remedy, gene remedy and radioligand remedy. “I began to wonder how could we possibly efficiently allocate capital into those areas and be a leader in all these other domains of health care.”
He lastly managed to do this, when he took the highest job, aged 41 in 2018, and inside a month adopted it up with the sale of Novartis’s stake in a shopper well being care three way partnership with GSK for $13 billion.
Since then, Novartis has turned its consideration to pure-play progressive medicines, with a concentrate on 5 therapeutic areas that embrace cardiovascular, immunology, neuroscience, strong tumors and hematology. Its present portfolio and pipeline embrace medication resembling Entresto, Kisqali, Iptacopan, Zolgensma, Kesimpta, Leqvio, Cosentyx, Pluvicto, and Scemblix, every of which the corporate reckons may have multi-billion-dollar peak gross sales potential. Three different medication, Remibrutinib, Ianalumab and Pelacarsen, are within the pipeline publish 2025. In the method, Novartis additionally offered off its eye put on enterprise, Alcon, exited its stake in pharma large Roche for over $20 billion, and spun off its generic medication arm, Sandoz, in 2023.
“We think about ourselves differentiating around three dynamics,” Narasimhan says. “One is in technology platforms. We are the leader in cell and gene therapy. We are the leader in RNA therapeutics and we are the leaders in an oncology area called radioligand therapies. The second is in global reach and the third is in talent where we can access global talent pools.”
Today, Novartis operates in some 108 markets, with 40 p.c of its revenues coming from the US alone and yearly, its medicines attain over 284 million sufferers. The firm additionally has drug growth centres in East Hanover within the US and Switzerland, aside from Hyderabad. In India, the Swiss multinational features by way of two completely different models: Novartis India Limited (NIL), which is listed on the inventory exchanges, and Novartis Healthcare Private Limited (NHPL). NIL is presently within the means of being offered whereas NHPL, which employs over 8,300 folks, will start to play a extra vital function within the international operations.
“It’s been an evolving role,” Narasimhan says concerning the Hyderabad operations. “India touches our programmes nearly in every single dimension.” Already, the group that designs scientific trials, regulatory filings, biotechnicians and stability testing is all primarily based out of India along with company features. The previous few years additionally noticed wider integration between analysis and drug growth groups within the US, Switzerland and India. The Hyderabad centre can be residence to twenty p.c of Novartis’s international management roles.
“I think that’s the big shift that’s happened over the last decade,” Narasimhan says. “No longer are we putting things here. This centre [Hyderabad] is transforming things across the company.”
“For a long time, India had played the role of providing backend and outsourcing support to innovators,” says Vishal Manchanda, senior vice chairman for institutional analysis at broking agency Systematix Group. “As innovators opt to directly engage in India with their own teams on ground for new chemical entity (NCE) research and development, it would foster a much-needed ecosystem for innovation. India has the required basic talent pool that can be nurtured. Contract research and manufacturing companies have certainly aided in creation of this talent pool.”
With its plan to construct on PK and chemistry sciences, Novartis will even begin hiring extra scientists, most certainly in a whole bunch, if not 1000’s, within the nation. “It’s a start and I think we see the talent base,” Narasimhan says. “It’s a mix of people who have had experience overseas coming back, but also the research institutes getting better and better.”
In addition, Novartis has additionally been pursuing scientific trials within the nation, with 51 lively scientific trials involving greater than 2,400 sufferers enrolled throughout greater than 370 trial websites.
Part of the larger technique
Last yr, after a number of years of sluggish development, Novartis lastly started seeing the outcomes of its pure-play innovation. The cash-rich pharma large—from all of the divestiture—had as many as 10 optimistic part three trials. “We had 10 positive phase three readouts last year, one of the highest, we believe, in our history,” Narasimhan says.
In the world of cell remedy, the corporate has introduced out a medication, KYMRIAH, a genetically modified autologous T-cell immunotherapy indicated for the remedy of sufferers as much as 25 years with B-cell precursor acute lymphoblastic leukemia (ALL) that’s refractory or in second or later relapse. Other improvements over the previous few years embrace medication resembling Inclisiran, a brand new anti-cholesterol drug, and Pluvicto, which offers with prostate most cancers.
Over the following three years, the corporate expects its gross sales development at 5 p.c yearly, led by the likes of medicine resembling Kisqali, a breast most cancers drug, with a peak annual gross sales potential of $4 billion. Another drug, Iptacopan, used to deal with paroxysmal nocturnal hemoglobinuria (PNH), has grow to be the primary oral monotherapy authorised by the FDA for a uncommon blood dysfunction and has a peak gross sales potential of $3.6 billion. The firm spends over $11 billion a yr on its R&D pipeline—virtually 25 p.c of its gross sales—making it one of many high 5 corporations in R&D investments.
Still, in direction of the later a part of the last decade, Novartis will see a few of its marquee merchandise lose patent safety, together with the favored coronary heart drug, Entresto. The drug accounts for over $6 billion in gross sales as of 2023, whereas one other drug, Cosentyx, used for psoriasis, ankylosing spondylitis and psoriatic arthritis, brings almost $5 billion in gross sales.
“The reality of the drug industry is you have ups and downs,” Narasimhan says. ‘But on average, when we look at the last 20 years, our returns on R&D are well above our cost of capital. The tricky thing is that it’s not a constant factor. What occurs is you’ll have a number of massively profitable medication, and you then’ll have a number of years the place you don’t have many successes, and it’s essential to settle for that, and have the endurance and knowledge to simply accept that you should have tough patches.” Usually, it takes over seven years to convey a brand new drug from preliminary scientific trials to the top of Phase III, with the common value at $2.3 billion.
That’s additionally why Novartis has been mopping up biotechnology corporations in the previous few years, after hiving off its subsidiaries. Last yr, Novartis accomplished 15 offers, of which 13 had been valued at lower than $1 billion whereas two others had been valued between $1 billion and $5 billion. Among its much-anticipated purchases are German oncology firm MorphoSys AG for $2.9 billion, Seattle-based Chinook Therapeutics for greater than $3.2 billion to bolster its kidney illness portfolio, and DTx Pharma for $1 billion for its small interfering RNA (siRNA) remedy portfolio for uncommon illnesses.
“We’ve committed to five percent growth between 2023 to 2027,” Narasimhan says. “We have 12 launches in the next two years, and we have a pretty full mid-stage pipeline.”
More importantly, it’s the gamble on the newer know-how that Narasimhan reckons to be the sport changer regardless that conventional areas of medication in areas of immunology, coronary heart illness and most cancers will proceed to develop. “If you look at the history of our industry, for the first 80 years, much of the work was with small molecule chemistry,” Narasimhan says. Interestingly, his grandfather had labored on the National Chemical Laboratories in Pune within the Fifties and Nineteen Sixties.
Work on small molecule chemistry led to drugs earlier than evolving into injectables, generally generally known as biologicals, within the latter half of the final century. “Now we have cell therapy, radioligand, RNA therapeutics and gene editing. And the question is which of these will become the medicines we look back on to say this is the next pillar of our industry,” Narasimhan explains. “For me, the most important for Novartis is to make strategic bets in those and we are leading in three of them and making them into significant areas of medicine.”
Lessons for India
Despite all its concentrate on innovating from India, the nation doesn’t function in its core markets. Of its international gross sales of $46 billion final yr, Novartis’s gross sales within the US exceeded $16 billion, with Europe following at $10 billion. China’s marketplace for Novartis is pegged at $4 billion whereas Japan is at $2 billion. India, for Novartis, accounts for $200 to $300 million in progressive medicines and as a part of its pure-play progressive medicines technique, the corporate has lined up the US, China, Germany and Japan as its core markets.
“It’s just a factor lower at the moment,” Narasimhan says concerning the Indian market. “The potential is large. China, a few years back, was not a significant market for Novartis. Now it’s our second-largest market and our fastest-growing large market. Because there was a shift to support innovative novel medicines at scale within the country.”
The Indian pharma business has been generally known as the ‘pharmacy of the world’ for many years. The business represents over 20 p.c of the worldwide generics provide by quantity and caters to roughly 60 p.c of the worldwide demand for vaccines. “India does not have a biotech ecosystem now,” Narasimhan says. “Over the next decade, I would see a biotech ecosystem start to form in India as it has in many places in the US, certain places in Europe and Shanghai. For that to happen, the observation would be that India would also have to form a stronger, and local market for innovative medicines,” Narasimhan says.
That might not come simple, particularly because the Indian authorities has a mandate to supply inexpensive medicines, notably because the reimbursement mechanism within the nation is comparatively poor, not like within the Western economies. That’s additionally why the Indian authorities has for lengthy been a staunch supporter of generic medicines, serving to convey medicines to the doorsteps of hundreds of thousands of unaffordable teams. “But if you play a long game, if you fast forward a decade or two decades, certainly I think that’s going to be a reality (India becoming a market),” Narasimhan says. “And there will be an opportunity for a company like Novartis.”
Much of China’s emergence as a key marketplace for Novartis, providing progressive life-saving medication and know-how has been led by a reform of mental property enforcement and information safety, along with a reform of the regulatory course of and a nationwide system to reimburse novel medication. “There’s a growing segment of self-pay and self-insured in India, but you would need that to be at a larger scale to create significant markets,” Narasimhan provides.
“The pie is becoming larger for more expensive treatment every year,” provides Manchanda. “Indian companies are now also driving innovation whether it is Sparc Life run by Sun Pharma or Aurigene life sciences. For a long time, MNCs have been invested in India, but have been primarily selling their branded generics which has now gradually started to meaningfully shift to marketing new chemical entity (NCE) and innovative drugs.”
Going the final mile
Now with India rising as a key innovation hub, and Novartis’s restructuring in place, Narasimhan is gearing up for the following part for the pharmaceutical main.
“I think we’re in a good place,” Narasimhan says. “What we need now is to continue the consistent performance for the coming years. But we’ll have ups and downs.” It has helped that his coaching has been in medication, spending his early years in Africa and India, working throughout bettering entry to well being care.
“I do think it creates a different lens,” Narasimhan says about his coaching as a physician. “I focus more on innovation and science. As pure-play, where our lifeblood is discovering and developing and getting these medicines to patients, this is what I’ve spent most of my life working on. So, I think that’s well-aligned.”
“Narasimhan took bold actions as soon as he took over the top leadership position of Novartis,” says Hassan of Rutgers Business School. “He divested low-performing generic and consumer health businesses, concentrated on the high performing patent-based innovative drugs. I understand he is a popular CEO among his employees with a fascination for high-tech innovation.”
So, does he reckon that the work he had got down to do is full now? “As you get further on in your CEO journey, you have to think about things that will impact medicine far beyond your time, because it takes so long to develop whatever we do… and it will likely be beyond the time I’m CEO,” says Narasimhan. “So, it becomes much more about how you can reshape the future of medicine with your work.”
At 47, Narasimhan, is barely getting began.
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