Novartis today disclosed plans to eliminate about 8,000 jobs worldwide as part of a cost-cutting effort intended to save the pharma giant at least $1 billion by 2024—part of a restructuring whose outlines were announced in April.

Those outlines included job reductions Novartis said back then would reach “a number in the single-digit thousands,” as well as a goal of delivering at least 4% annual sales growth through 2026, and a combining of its pharmaceuticals and oncology business units.

Today, Novartis revealed plans to support the newly-combined unit, called Innovative Medicines, through the next phase of its restructuring. That next phase, Novartis said, would entail aligning and shrinking or “rationalizing” support operations that include Finance, People & Organization, Legal, Communications & Engagement, and Global Public Affairs, among others.

The Innovative Medicines unit, Novartis said, will enable the company to reduce duplications of business structures in every country.

Novartis is also combining its Technical Operations and Customer & Technology Solutions units into a new Operations unit.

“The new structure will be both leaner and simpler and as such the company intends to eliminate roles across the organization, subject to local information and consultation requirements,” Novartis said in a statement emailed to GEN and other news organizations.

“The company is making good progress in implementing these changes across the organization and has completed the appointment of most leadership teams at the global level,” the company added.

Novartis launched its restructuring, saying in April it intended “to accelerate growth, strengthen pipeline, and increase productivity.” The restructuring followed pressure from shareholders on CEO Vas Narasimhan to deliver better results following several setbacks.

One setback is the failure of the anti-IgE antibody ligelizumab (QGE031), a next-generation successor to its blockbuster respiratory drug Xolair® (omalizumab) in a pair of Phase III trials in chronic spontaneous urticaria (CSU), PEARL 1 (NCT03580369) and PEARL 2 (NCT03580356). Novartis acknowledged in December 2021 that the studies met primary endpoints of superiority at Week 12 for ligelizumab versus placebo, but not versus Xolair, which is approved for CSU as well as allergic asthma and nasal polyps.

Also last year, Novartis’ canakinumab (ACZ885)—an interleukin-1β blocker marketed for immunology indications as Ilaris®—failed a pair of clinical trials in non-small cell lung cancer (NSCLC). In March 2021, canakinumab failed CANOPY-2 (NCT03626545) by missing its primary endpoint of overall survival in advanced or metastatic patients whose cancer progressed while on or after previous treatments.

In October 2021, Novartis acknowledged that Ilaris plus Merck & Co.’s Keytruda® (pembrolizumab) plus platinum-based doublet chemotherapy failed CANOPY-1 (NCT03631199) by not showing statistically significance in its primary endpoints of overall survival (OS) and progression-free survival (PFS) compared to patients receiving placebo plus pembrolizumab plus platinum-based doublet chemotherapy.

At the time, Novartis said Ilaris did show “potentially clinically meaningful improvements” in both PFS and OS in pre-specified patient subgroups based on the baseline inflammatory biomarker hs-CRP, and other biomarker-defined subgroups.

In April, at the American Association for Cancer Research annual meeting in New Orleans, Novartis presented data showing a 13% reduction in the risk of death and a 17% drop in the risk of disease progression or death. However, both reductions failed to reach statistical significance.

No COVID profits

Beyond clinical failures, another setback for Novartis was its failure to generate billions of dollars in profits by developing vaccines or drugs for COVID-19, as Pfizer, its collaboration partner BioNTech, and Moderna have done.

Investors responded to news of the layoffs by ending Novartis’ shares—traded in Zurich on the SIX Swiss Exchange—down 1.1%, to CHF 81.14 ($87.89). Novartis’ American Depositary Shares, traded on the New York Stock Exchange, dipped 1.3% in trading today, closing at $84.17.

Novartis said 1,400 of the 8,000 jobs to be eliminated are based in its headquarters country of Switzerland, where the company is based in Basel. Switzerland accounts for approximately 11,600 people within Novartis’ total workforce of 108,000.

“In Switzerland, the process of formal consultation with the employee representatives for non-management levels, and the consultations with managers in the impacted areas, are now underway,” Novartis stated. “We will treat all impacted associates in a fair and transparent manner, and we will work with each associate individually to support their specific needs.

Novartis has promised to offer workers whose jobs are being eliminated job brokering, career center support, best placement, and development activities intended to improve employee chances of finding new jobs internally and externally.

“Our goal is to design and implement these changes over the course of the next few months and we are committed to doing so without compromising our ability to serve our customers and patients,” the company added.

Novartis’ announcement today did not resolve one open question from when the restructuring was first announced: Would Novartis seek to dispose of its Sandoz generic drug business? The company continues to review its options.

A Sandoz disposition is expected to generate billions for Novartis. Last year Novartis reaped $20.7 billion by selling its 33% stake in another Swiss biopharma giant, Roche.

When it announced the restructuring in April, Novartis set expectations that it would grow in part through mergers and acquisitions, while disposing of other operations, by creating a new executive position, Chief Strategy and Growth Officer, reporting directly to Narasimhan. Novartis has filled that post with Aharon (Ronny) Gal, PhD, a longtime analyst with Sanford Bernstein who is the firm’s senior analyst covering the U.S. biopharmaceutical industry. Gal is expected to join Novartis and its Executive Committee no later than August 1.

Novartis has committed to retaining enough available resources to acquire companies or promising drugs and technologies, even as it is in process of buying back $15 billion of its shares by the end of 2023, something the company announced in December.

The restructuring has not halted spending or business development efforts by Novartis.

On Thursday, the company committed $250 million over five years to advance R&D of new treatments against neglected tropical diseases and malaria. Novartis said its commitment included $100 million to advance R&D for Chagas disease, leishmaniasis, dengue, and cryptosporidiosis; and $150 million for next-generation antimalarials and a new formulation for babies under 5kg (11 pounds) with malaria.

Two days earlier on June 21, Novartis committed up to $1.4 billion-plus to Precision BioSciences as the companies announced an in vivo genome editing collaboration. Precision will develop a custom nuclease based on its ARCUS® platform, in order to insert a therapeutic transgene at a “safe harbor” location in the genome as a potential one-time treatment for blood disorders such as sickle cell disease and beta thalassemia.

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