Novartis Splits Chair and CEO Positions, Names Joe Jimenez CEO

Article preview reprinted from IN VIVO -  January/February, 2010

In a move that was somewhat abrupt, but hardly surprising, Novartis AG in late January announced that Joe Jimenez, who currently runs Novartis Pharma AG, would become the company's CEO, effective February 1. Long-time chairman and CEO David Vasella will remain as chairman. The announcement brings some closure to a process that began officially more than a year ago, as Novartis worked to get its succession planning right. Read more...

Novartis Splits Chair and CEO Positions, Names Joe Jimenez CEO

Article preview reprinted from IN VIVO -  January/February, 2010

Novartis Splits Chair and CEO Positions, Names Joe Jimenez CEO

In a move that was somewhat abrupt, but hardly surprising, Novartis AG on January 26 announced that Joe Jimenez, who currently runs Novartis Pharma AG, would become the company's CEO, effective February 1. Long-time chairman and CEO David Vasella will remain as chairman.

In announcing Jimenez' appointment on the company's fourth-quarter earnings call, Vasella said the company was simplifying its organizational structure. As part of the move, David Epstein, currently head of the oncology business, which is the company's fastest-growing unit in pharmaceuticals, was named to replace Jimenez as global division head of pharmaceuticals. Jon Symonds will become CFO, replacing Raymund Breu, who is retiring.

The announcement brings some closure to a process that began officially more than a year ago, as Novartis worked to get its succession planning right. The last phase was set in motion in October 2008, when Joerg Reinhardt, then head of vaccines and diagnostics, was named to the newly created post of chief operating officer and several other top executives were shuffled around. At the time, Vasella explained that Reinhardt would be able to share some of the chairman's workload, a situation that led some to speculate he would be a strong candidate to succeed the CEO.

In the January 26 announcement, however, Vasella said that three executive positions, including Reinhardt's, as well as the head of corporate affairs and head of group quality and technical operations, would be eliminated. As a result, the executives in those positions--Reinhardt and two other long-time members of the current executive board, Andreas Rummelt and Thomas Wellauer--are leaving the company, reducing the size of the executive board from 12 to 9.

In announcing the changes, Vasella didn't dwell on reasons for choosing Jimenez over other contenders, or future visions for the company, except to note briefly that priorities are already in place. "There's not much change. Certainly, in the short term, once we get approvals and agreements, the integration of Alcon will be crucial while continuing to invest in innovation," Vasella said on the earnings call. Novartis is in the process of buying the Swiss ophthalmology company Alcon Inc. (a division of Nestle SA) for $50 billion.

Jimenez's background certainly could help Novartis as it struggles to overcome the 2012 patent expiration of its best-selling anti-hypertensive medication, valsartan ( Diovan), and, three years after that, its oncology drug, imatinib ( Gleevec). Diovan had worldwide sales of close to $6 billion in 2009, while Gleevec sales were close to $4 billion. Before joining Novartis as head of consumer health in April 2007, he was a top executive at H.J. Heinz and had worked for other consumer goods companies—industries where cut-throat consumer marketing tactics and cost efficiency tend to be critical. He became head of pharmaceuticals in October 2007.

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Companies mentioned in this article

Nestle SA

Alcon Inc.

Novartis AG

Ciba Vision Corp.

Novartis Pharma AG

Sandoz

Ebewe Pharma GMBH

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