Head of Novartis’ Sandoz unit steps down amid transformation programme

Novartis announced Thursday that Richard Francis will step down as CEO of the company’s Sandoz division on March 31 to be replaced on an interim basis by Francesco Balestrieri, who currently serves as European region head of the generics unit.

CEO Vas Narasimhan explained “as we initiate a multi-year transformation programme for the business and move to make it more autonomous, [Francis] has decided that for personal reasons he cannot commit to stay with Sandoz until the transformation is completed.” Last year, Novartis agreed to sell certain parts of the Sandoz business in the US to Aurobindo Pharma as it focuses the unit “on complex generics, value-added medicines and biosimilars.”

Earlier this year, Narasimhan said Novartis was working on transforming the Sandoz division to make it “an autonomous entity over the next 18 months,” adding that once the overhaul is completed, “we can have further conversations about where we want to head from there.” However, Novartis’ chairman Joerg Reinhardt recently suggestedthat the company does not intend to divest the Sandoz business.

Commenting on his decision to stand down, Francis said “as we announced earlier this year, Sandoz is embarking on a significant transformation. While I am excited by this, I realise that this is a multi-year journey which I cannot commit to and therefore have decided that now is the right time to step down.” Francis was appointed head of Sandoz in 2014, joining the company from Biogen, where he served as senior vice president of US commercial operations.

In response to Francis’ departure, Zuercher Kantonalbank analyst Michael Nawrath said “we see our assumption confirmed that in the next 12 to 18 months a definitive decision may come about whether the generic unit will remain within Novartis.” Nawrath added “even though the Novartis chairman said recently Sandoz isn’t for sale for now, a spin-off like they’re doing with Alcon would align with the strategy of becoming a focused, pure-play drugmaker.”



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