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Jan 13, 2012

Novartis Plans $450M Cost Cuts to Shoulder Diovan Patent Loss, Aliskiren Safety Concerns

  • It will cost Novartis an estimated $160 million dollars this quarter to effect a restructuring of its U.S. general medicines division in the hope of saving some $450 million a year by 2013. The move is being made in light of both the impending loss of its U.S. Diovan (valsartan) patent in September and safety issues associated with combining the antihypertensive drug Rasilez/Tekturna (aliskiren) with angiotensin converting enzyme inhibitors or angiotensin receptor blockers

    The U.S. restructuring will include the loss of some 1,630 positions in the field and another 330 at its headquarters. “We recognize that the next two years will be challenging in the pharmaceuticals division, and we are proactively making these changes to further focus our pipeline on the best opportunities and align our market position on our growth brands,” comments David Epstein, division head of Novartis Pharmaceuticals. “These are difficult but necessary decisions that will free up resources to invest in the future of our business which we view as well suited to bring new valuable therapies to patients and payors.”

    In December the Phase III Altitude study evaluating aliskiren combined with ACE or ARB therapy in patients with type 2 diabetes and renal impairment was halted because of an increased risk of nonfatal stroke, renal complications, hyperkalemia, and hypotension. As a result Novartis has also stopped promoting aliskiren for use in combination with either ACE or ARB drugs in hypertensive patients with type 2 diabetes.

    The blood pressure drug Diovan made global sales of $1.43 billion in the third quarter of 2011, down 7% in constant currency terms compared with the same period in 2010. Novartis said declining global sales related to the introduction of generic valsartan in some markets. Sales of the valsartan-amlopidine combination pill, Exforge, were $317 million in Q3 2011, up 36%.

    On releasing its Q3 results back in October 2011, Novartis said that the Diovan group of drugs still maintained its position as the top-selling branded antihypertensive therapy worldwide, with a global market share of 13.5% of the hypertension market during 2011 until August. Sales of Tekturna/Rasilez reached $159 million during Q3 2011, up 34% in constant currency terms. 


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