Novartis International AG

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Type	Public AG
Traded as	SIX: NOVN, NYSE: NVS
Industry	Pharmaceuticals
Founded	1996 (from merger)
Headquarters	Basel, Switzerland
Key people	Daniel Vasella (Chairman), Joseph Jimenez (CEO)
Products	Pharmaceuticals, generic drugs, over-the-counter drugs, vaccines, diagnostics, contact lenses, animal health (list...)
Revenue	US $50.624 billion (2010)[1]
Operating income	US $11.526 billion (2010)[1]
Net income	US $9.969 billion (2010)[1]
Total assets	US $123.32 billion (end 2010)[1]
Total equity	US $69.769 billion (end 2010)[1]
Employees	119,418 (FTE, end 2010)[1]
Subsidiaries	Ciba Vision, Sandoz, Alcon, Chiron Corporation
Website	www.novartis.com

Novartis International AG is a multinational pharmaceutical company based in Basel, Switzerland, ranking number two in sales (46.806 billion US$) among the world-wide industry in 2010.^[2]

Novartis manufactures such drugs as clozapine (Clozaril), diclofenac (Voltaren), carbamazepine (Tegretol), valsartan (Diovan), imatinib mesylate and (Gleevec / Glivec). Additional agents include ciclosporin (Neoral / Sandimmun), letrozole (Femara), methylphenidate (Ritalin), terbinafine (Lamisil), and others.

Renamed to Novartis following an acquisition by Ciba-Geigy, it owns Sandoz, a large manufacturer of generic drugs. The company formerly owned the Gerber Products Company, a major infant and baby products producer, but sold it to Nestlé on 1 September 2007.^[3][4][5][6]

Novartis is a full member of the European Federation of Pharmaceutical Industries and Associations (EFPIA)^[7] and of the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA).^[8]

History[link]

Novartis AG headquarters in Basel

Novartis was created in 1996 from the merger of Ciba-Geigy and Sandoz Laboratories, both Swiss companies with long histories. Ciba-Geigy was formed in 1970 by the merger of J. R. Geigy Ltd (founded in Basel in 1758) and CIBA (founded in Basel in 1859). Combining the histories of the merger partners, the company's effective history spans 250 years.^[9]

In 2012, the Company cut ~2000 positions in the United States, most in sales, in response to anticipated revenue downturns from the hypertension drug Diovan, which was losing patent protection, and the realization that the anticipated successor to Diovan, Rasilez, was failing in clinical trials.^[10] The 2012 personnel reductions follow ~2000 cut positions in Switzerland and the United States in 2011, ~1400 cut positions in the United states in 2010, and a reduction of "thousands" and several site closures in previous years.^[11]

Novartis became the biggest manufacture of generic skin care medicine, after agreed to buy Fougera Pharmaceuticals for $1.525 billion in cash on May 2, 2012.^[12]

Collaborative research[link]

In addition to internal research and development activities Novartis is also involved in publicly funded collaborative research projects, with other industrial and academic partners. One example in the area of non-clinical safety assessment is the InnoMed PredTox.^[13][14] The company is expanding its activities in joint research projects within the framework of the Innovative Medicines Initiative of EFPIA and the European Commission.^[15] The company's research operations have their global headquarters in Cambridge, Massachusetts.^[16]

Ciba-Geigy[link]

Johann Rudolf Geigy-Gemuseus (1733–1793) began trading in 1758 in "materials, chemicals, dyes and drugs of all kinds"^[17] in Basel, Switzerland. Johann Rudolf Geigy-Merian (1830–1917) and Johann Muller-Pack acquired a site in Basel in 1857, where they built a dyewood mill and a dye extraction plant. Two years later, they began the production of synthetic fuchsine. In 1901, they formed the public limited company Geigy and the name of the company was changed to J. R. Geigy Ltd in 1914.

In 1859, Alexander Clavel (1805–1873) took up the production of fuchsine in his factory for silk-dyeing works in Basel. In 1864, a new site for the production of synthetic dyes was constructed, and in 1873, Clavel sold his dye factory to the new company Bindschedler and Busch. In 1884, Bindschedler and Busch was transformed into a joint-stock company with the name "Gesellschaft für Chemische Industrie Basel" (Company for Chemical Industry Basel). The acronym, CIBA, was adopted as the company's name in 1945.

In 1925, J. R. Geigy Ltd. began producing textile auxiliaries,^{[clarification needed]} an activity which Ciba took up in 1928.

In 1939, Geigy chemist Paul Hermann Müller discovered that DDT was effective against malaria-bearing insects. He received the 1948 Nobel Prize in Medicine for this work.

CIBA and Geigy merged in 1971 to form Ciba‑Geigy Ltd. ( /ˌsiːbə ˈɡaɪɡi/).

In 1996 this company merged with Sandoz, with the pharmaceutical divisions of both staying together to form Novartis, other Ciba-Geigy businesses being spun off as independent companies.

Sandoz[link]

The Chemiefirma Kern und Sandoz ("Kern and Sandoz Chemistry Firm") was founded in 1886 by Alfred Kern (1850–1893) and Edouard Sandoz (1853–1928). The first dyes manufactured by them were alizarine blue and auramine. After Kern's death, the partnership became the corporation Chemische Fabrik vormals Sandoz in 1895. The company began producing the fever-reducing drug antipyrin in the same year. In 1899, the company began producing the sugar substitute, saccharin. Further pharmaceutical research began in 1917 under Arthur Stoll (1887–1971), who is the founder of Sandoz's pharmaceutical department in 1917.^[18] In 1918, Arthur Stoll isolates ergotamine from ergot; the substance is eventually used to treat migraine and headeaches and is introduced under the trade name Gynergen in 1921.

Between the World Wars, Gynergen (1921) and Calcium-Sandoz (1929) were brought to market. Sandoz also produced chemicals for textiles, paper, and leather, beginning in 1929. In 1939, the company began producing agricultural chemicals.

The psychedelic effects of lysergic acid diethylamide (LSD) were discovered at the Sandoz laboratories in 1943 by Arthur Stoll and Albert Hofmann (patent by Stoll and Hofmann in USA on Mar. 23, 1948). Sandoz began clinical trials and marketed the substance, from 1947 through the mid 1960s, under the name Delysid as a psychiatric drug, thought useful for treating a wide variety of mental ailments, ranging from alcoholism to sexual deviancy. Sandoz suggested in its marketing literature that psychiatrists take LSD themselves,^[19] to gain a better subjective understanding of the schizophrenic experience, and many did exactly that and so did other scientific researchers. For several years, the psychedelic drugs also were called "psychotomimetic" because they were thought to mimic psychosis. Later research caused this term to be abandoned, as neuroscientists gained a better understanding of psychoses, including schizophrenia. Research on LSD peaked in the 1950s and early 1960s. Sandoz withdrew the drug from the market in the mid-1960s. The drug became a cultural novelty of the 1960s after psychologist Timothy Leary at Harvard University began to promulgate its use for recreational and spiritual experiences among the general public.

Sandoz opened its first foreign offices in 1964.

In 1967, Sandoz merged with Wander AG (known for Ovomaltine and Isostar). Sandoz acquired the companies Delmark, Wasabröd (a Swedish manufacturer of crisp bread), and Gerber Products Company (a baby food company).

On 1 November 1986, a fire broke out in a production plant storage room, which led to Sandoz chemical spill and a large amount of pesticide being released into the upper Rhine river. This exposure killed many fish and other aquatic life.

In 1995, Sandoz spun off its specialty chemicals business to form Clariant. Subsequently, in 1997, Clariant merged with the specialty chemicals business that was spun off from Hoechst AG in Germany.^[20]

In 2005, Sandoz expanded significantly though the acquisition of Hexal, one of Germany's leading generic drug companies, and Eon Labs, a fast-growing United States generic pharmaceutical company.

"Sandoz" continues to be used as a Novartis generic drug brand (see below for details).

After the merger[link]

Suffern, New York: one of the Novartis pharmaceutical production facilities in the United States

After the merger, Novartis reorganized its operating units and spun out its chemical activities as Ciba Specialty Chemicals (now a part of BASF).

In 1998, the company made headlines with its biotechnology licensing agreement with the University of California at Berkeley Department of Plant and Microbial Biology. Critics of the agreement expressed concern over prospects that the agreement would diminish academic objectivity, or lead to the commercialization of genetically modified plants. The agreement expired in 2003.

Novartis combined its agricultural division with that of AstraZeneca to create, Syngenta, in November 2000.

In 2003, Novartis created a subsidiary that bundles its generic drug production, reusing the predecessor brand name of Sandoz.^[21]

In 2005, Novartis introduced Certican (Everolimus), an immunosuppressant, and in October 2006 began marketing Telbivudine, a new antiviral drug for hepatitis B.

On 20 April 2006, Novartis acquired the California-based Chiron Corporation. Chiron formerly was divided into three units: Chiron Vaccines, Chiron Blood Testing, and Chiron BioPharmaceuticals, to be integrated into Novartis Pharmaceuticals. Chiron Vaccines and Chiron Blood Testing now are combined to form Novartis Vaccines and Diagnostics.

The ongoing Basel Campus Project has the aim to transform the St. Johann site - Novartis headquarters in Basel - "from an industrial complex to a place of innovation, knowledge, and encounter".^[22]

On 12 October 2009, Novartis has entered into an agreement for exclusive US and Canadian rights to Fanapt(iloperidone), a new oral medication that is approved by the U.S. Food and Drug Administration (FDA) for the acute treatment of adults with schizophrenia.^[23]

On 6 November 2009, Novartis reached an agreement to acquire an 85% stake in the Chinese vaccines company Zhejiang Tianyuan Bio-Pharmaceutical Co., Ltd. as part of a strategic initiative to build a vaccines industry leader in this country and expand the Group's limited presence in this fast-growing market segment. This proposed acquisition will require government and regulatory approvals in China.^[24]

On 4 January 2010, Novartis offered to pay US $39.3 billion to fully acquire Alcon, the world's largest eye-care company, including a majority stake held by Nestlé. Novartis had bought 25% of Alcon in 2008.^[25]

On 11 March 2010, Novartis settled their patent suit in the US District Court for the District of New Jersey with IntelliPharmaCeutics International, Ltd., a Canada-based specialty pharmaceutical company, and its licensee Par Pharmaceutical Inc. over a generic version of the attention deficit hyperactivity disorder drug Focalin XR (dexmethylphenidate hydrochloride).^[26]

Basel headquarters campus redesign[link]

An ongoing Basel Campus Project has the aim to transform the Saint Johann site—Novartis headquarters in Basel—"from an industrial complex to a place of innovation, knowledge, and encounter".^[22] The pharmaceutical giant decided to transform the existing Sandoz office buildings and chemical factories of its headquarters in 2001.

The buildings gradually were demolished and replaced with works by architects and artists of international stature. Frank Gehry, Rafael Moneo, and from SANAA, Kazuyo Sejima and Ryue Nishizawa were among the architects and Jenny Holzer and Richard Serra among the artists. Marked diversity of forms now dominates the campus. Novel features and technologies were introduced by Gehry to conform to the building standards of the Swiss government that prohibit air-conditioning, while still selecting a contemporary style of massive use of glass exteriors. One adaptation by the architect includes the integration of a building vent, teepee-style, through the roof, which creates a chimney effect that draws cool air in at the lower levels and vents warmer air.

Products[link]

Pharmaceuticals[link]

Source for all "(2007)" sales figures:^[27]

Consumer health (OTC)[link]

• Benefiber
• Buckley's cold and cough formula
• Bufferin
• Comtrex cold and cough
• Denavir/Vectavir
• Desenex
• Doan's pain relief
• Ex-Lax
• Excedrin
• Fenistil
• Gas-X
• Habitrol
• Keri skin care
• Lamisil foot care
• Lipactin Herpes symptomatic treatment
• Maalox
• Nicotinell
• No-doz
• Otrivine
• Prevacid 24HR
• Tavist
• Theraflu
• Triaminic
• Vagistat
• Voltaren

In January 2009, the United States Department of Health and Human Services awarded Novartis a $486 million contract for construction of the first U.S. plant to produce cell-based influenza vaccine, to be located in Holly Springs, North Carolina. The stated goal of this program is the capability of producing 150,000,000 doses of pandemic vaccine within six months of declaring a flu pandemic.^[30]

Animal health[link]

Pet Care

• Interceptor (Milbemycin oxime), oral worm control product
• Sentinel Flavor Tabs (Milbemycin oxime, Lufenuron), oral flea control product
• Deramaxx (Deracoxib), oral treatment for pain and inflammation from osteoarthritis in dogs
• Capstar (Nitenpyram), oral tablet for flea control
• Milbemax (Milbemycin oxime, Praziquantel), oral worm treatment
• Program (Lufenuron), oral tablet for flea control

Livestock

• Acatalk Duostar (Fluazuron, Ivermectin), tick control for cattle
• CLiK (Dicyclanil), blowfly control for sheep
• Denagard (Tiamulin)
• Fasinex (Triclabendazole)
• ViraShield

Bioprotection (insect and rodent control)

• Actara (Thiamenthoxam)
• Atrazine (Atrazine)
• Larvadex (Cyromazine)
• Neporex (Cyromazine)
• Oxyfly (Lambda-cyhalothrin))
• Virusnip (Potassium monopersulfate)

Research and development[link]

The major bases for R&D are Basel (Switzerland), Hyderabad (India), Shanghai (China), and Cambridge (USA). Operations in China are set for rapid expansion within the next^[when?] five years.^[31]

Major therapeutic areas are autoimmunity/transplantation/inflammatory disease, cardiovascular disease, diabetes, gastrointestinal disease, infectious diseases, musculoskeletal disease, neuroscience, oncology, ophthalmology, and respiratory diseases.

Controversies and criticism[link]

Challenge to India's patent laws[link]

In 2006, Novartis launched a court case against India seeking to prohibit the country from developing generic drugs based on patented medicines.^[32] Novartis had challenged a law that allows India to refuse to recognize a patent for an existing medicine if there is a modified formula resulting in a re-patent of the drug.^[33] Oxfam claimed that "If Novartis wins millions of people living in poverty world wide could be deprived of affordable medicines".^[34] Oxfam along with FairPensions asked institutional investors to use their shareholder rights to put pressure on Novartis to drop its appeal.^[35][36] On August 5, 2007, the Madras High Court ruled against Novartis saying that, "Novartis' legal challenge - mounted to limit competition to its own patented medicines - was a threat to people suffering from cancer, HIV and AIDS, diabetes and other diseases who are too poor to pay for them."^[37] The high court also claimed to have no jurisdiction on whether Indian Patent law complied with WTO patent guidelines.

In the months leading up to the hearing, more than half a million people wrote to the CEO of Novartis expressing their opposition to the suit. However, Novartis decided to appeal the ruling and sought the intervention of the Supreme Court of India in the matter.^[38]

Advertising practices[link]

In September 2008, the U.S. Food and Drug Administration (FDA) sent a notice to Novartis Pharmaceuticals regarding its advertising of Focalin XR, an ADHD drug, in which the company overstated its efficacy while marketing to the public and medical professionals.^[39]

"No" to free flu vaccines[link]

In June 2009, Novartis declined to provide free vaccines to the poor in order to counter a current flu epidemic, saying developing nations or donor nations should cover the costs. Daniel Vasella, Novartis chief executive, told the Financial Times that he would consider offering discounted pricing to low-income nations, but unlike GlaxoSmithKline, would not offer vaccines for free.^[40]

Sexual discrimination[link]

On May 17, 2010, a jury in the United States District Court for the Southern District of New York awarded $3,367,250 in compensatory damages against Novartis, finding that the company had committed sexual discrimination against twelve female sales representatives and entry-level managers since 2002, in matters of pay, promotion, and treatment after learning that the employees were pregnant. Two days later (the trial was bifurcated so that the punitive damages verdict was argued and deliberated separately), the jury awarded punitive damages in the amount of $250 million, representing about 2% of Novartis' gross revenues for 2009. Normally punitive damages would be reduced to less than a 10:1 ratio, but the trial was for a group of named plaintiffs in a class action, who were representing a class of 5,600 class members. The jury was instructed to award compensatory damages just to the named plaintiffs, but to award punitive damages to the entire class. Once the court makes findings on compensatory damages for the remaining class members (which are estimated by plaintiffs' counsel at just under $1 billion), the $250 million is expected to satisfy the Supreme Court's single-digit ratio test for proportionality of compensatory to punitive damages.^[41]

Settlement of fraud charges[link]

In September, 2010, Novartis agreed to pay US$422.5 million in criminal and civil claims and enter Corporate Integrity Agreement with the US Office of the Inspector General.^[42] According to the New York Times "Federal prosecutors accused Novartis of paying illegal kickbacks to health care professionals through speaker programs, advisory boards, entertainment, travel and meals. But aside from pleading guilty to one misdemeanor charge of mislabeling in an agreement that Novartis announced in February, the company denied wrongdoing."^[43] In the same New York Times article, Frank Lichtenberg, a Columbia professor who receives pharmaceutical financing for research on innovation in the industry, said off-label prescribing was encouraged by the American Medical Association and paid for by insurers, but off-label marketing was clearly illegal. “So it’s not surprising that they would settle because they don’t have a legal leg to stand on,” he said.

Using the courts to prevent British Health Trusts from switching to cheaper alternatives[link]

According to the BBC, Novartis is using the courts to try and prevent British NHS Trusts switching from using Lucentis at £700 an injection to using rival Avastin at £60 an injection citing concerns for patient safety due to the unlicensed nature of Avastin in the treatment of wet Age Related Macular Degeneration ^[44]

See also[link]

Companies portal

• Top 100 US Federal Contractors
• josiphos ligands

References[link]

External links[link]

• Official website

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