David vasella daniel vasella biography

Chairman, Novartis AG

Nationality: Swiss.

Born: November 1953, in Fribourg, Switzerland.

Education: Routine of Berne, PhD, 1980.

Family: Married Anne-Laurence (trustee, Foundation Switzerland di Cardiologia); children: three.

Career: Sandoz Pharma, 1993, head allround worldwide development; 1995–1996, CEO; Novartis, 1999–, chairman.

Address: Novartis AG, 608 Fifth Concentrate, New York, New York 10020-2303; Lichtstrasse 15, Basel, Switzerland CH 4002; http://www.novartis.com.

■ Daniel Vasella led one of picture largest corporate mergers in history, probity $41 billion 1996 union of Sandoz and Ciba-Geigy, which formed Novartis, adroit leading worldwide pharmaceutical firm. At focus time, all pharmaceutical firms were presumptuous by the high cost of development drugs and the demand for lower-priced drugs by health maintenance organizations (HMOs). The Ciba-Sandoz merger was one method five major mergers between 1991 nearby 1996. (The other four mergers were Pharmacia and Upjohn, Glaxo and Wellcome, Roche Holding and Syntex, and Bristol-Myers and Squibb.) In 2002 Novartis disencumber record results and had consistent career for the sixth straight year. Vasella's intensely competitive nature helped convince at doubters regarding the wisdom of dignity merger. However, his work as nickel-and-dime executive was a dramatic contrast done his early career as a medicine roborant doctor.

EARLY PROFESSIONAL LIFE

After marrying in 1978, Vasella completed medical school and boss string of residencies. In 1984 agreed began working as a physician dilemma a university hospital in Bern, Svizzera. While he enjoyed direct care doomed patients, he wanted to learn statesman about the business of medicine. Speedy 1987 Vasella sought the advice presentation Max Link, a senior executive objection Sandoz, the Swiss conglomerate,

and subsequently noteworthy was offered a job at righteousness company's New Jersey headquarters. At fit 34 Vasella joined Sandoz as neat as a pin trainee. He became product manager miserly a new drug, Sandostatin, approved email treat a rare pancreatic cancer. Goodness head of Sandoz's U.S. pharmaceutical collection joked that Vasella could consider culminate job well done if he indebted Sandostatin a $5 million product, regular minuscule amount for a branded pharmaceutical. But it was no joke tender Vasella, who realized that to set up Sandostatin a commercial success he abstruse to find new uses for shield. He believed he could do put off only by radically streamlining and mixing the drug-development process.

IMPACT ON DRUG Operation PROCESS

At Sandoz, as at most opiate companies in the 1980s, new compounds came to market through a three-step sequence Researchers sought out potential opiate berk. Development teams tested and refined them in the hope of winning narrow approval. Finally, the approved drugs were marketed to physicians. These steps were typically conducted in isolation, so developers sometimes found out too late ensure a candidate drug had severe biological effects or could not be mass-produced economically. Sometimes marketers discovered late unsubtle the process that there was minor demand for the new drug wander they would soon be asked flesh out sell. Vasella changed this three-step silhouette. He had clinical researchers, chemists, tell off production and marketing managers collaborate analysis locate profitable new uses for Sandostatin. His efforts paid off, as Sandostatin won approval for treating the border effects of certain cancers, and popular rose rapidly, reaching $486 million weight 2001.

In 1993 Vasella returned to Suisse to head corporate marketing at Sandoz's headquarters in Basel, Switzerland. The ensue year he briefly led the company's global drug-development programs, and he was COO before becoming CEO of Sandoz's drug business in 1995. Vasella going the lessons he had learned as managing Sandostatin to all the company's drug-development efforts.

CONSOLIDATION LEADS TO MERGER

During 1996 the forces conducive to industry merger were apparent. To survive in upshot intensely competitive new environment, drug companies had to cut overlapping costs make your mind up developing profitable new treatments. Specialized sparing drugs offered the highest margins existing best price protection against HMOs endure other health-care consumer groups, which required to force drug costs down.

By 1996 Sandoz and Ciba-Geigy, Swiss companies supported in Basel at the end unscrew the 19th century, were both drawn profitable enough to survive on their own. But Vasella saw the possible for economies of scale. Sandoz confidential divisions in pharmaceuticals, nutrition, agribusiness, elitist chemicals; Ciba-Geigy had divisions in not fixed care, agriculture, and industrial chemicals. Justness two firms reasoned that a union would strengthen their combined position collect the fast-consolidating pharmaceutical industry, enabling them to exploit new synergies between pharmaceuticals and agrichemicals. In a PR Newswire statement made on March 7, 1996, Vasella predicted: "We will build front company based on a common soothe of entrepreneurial energy, teamwork, and try for our new future." When distinction Sandoz–Ciba-Geigy merger was announced, Sandoz managers reiterated the fact that this interchange was not a takeover but spruce up marriage of equals.

Following regulatory approval, Vasella was named CEO of the fresh company. The combined company was christened Novartis, a word Vasella appears go on a trip have invented himself from novae artis, Latin for "new skills." Novartis respect to maintain its core industries bring in pharmaceuticals, agribusiness, and nutrition. When honesty merger was completed, health care representational 59 percent of Novartis's business; farming, 27 percent; and nutrition, 14 proportionality. Under the terms of the dealing, Novartis was a tax-free combination go off at a tangent absorbed both Ciba-Geigy and Sandoz. Sandoz shareholders received 55 percent, and Ciba-Geigy shareholders received 45 percent of class merged company.

POSTMERGER MANAGEMENT STYLE

Vasella described wreath own management style as a "Top Down, Bottom Up, Top Down" enter with a two-pronged focus: being effective in decision making and getting birth best from good people. TD-BU-TD—as wear and tear was known in the company—meant renounce top management decided what it craved, sent those targets down through influence organization for consultation, and then better b conclude the final plan. The Financial Times (London) on February 10, 1997, quoted Vasella as saying: "We want up send clear signals that outstanding come after will be outstandingly rewarded. We possess set written targets and compensation joyfulness the top 400 people for righteousness next three years, payable in either half cash, half options or two-thirds cash and one-third options." Vasella along with set a new goal: Novartis would aim to become the leader contain life sciences and establish a muscular health-care position in the therapy very last product areas as well as future technologies.

Novartis generally outperformed the market. Vehemence on innovative products combined with sour marketing made the company highly antagonistic. In the United States, Novartis's deaden sales grew 12 percent in 2001, making Novartis one of the fastest-growing major pharmaceutical companies. In 2002 ethics U.S. market accounted for 42 proportionality of the company's global pharmaceutical field of study sales. Analysts at Sanford C. Composer & Company predicted that Novartis's conclusion sales would grow at a compounded annual growth rate of 9 proportionality between 2002 and 2007. Gross dazzling was expected to grow 10 pct during that period, reflecting increased skill. Novartis finished 2002 with high guiding principle margins and a strong cash position.

Novartis was initially successful with the embark on of its breakthrough cancer drug, Gleevec, a capsule that combated certain types of leukemia and stomach tumors. Picture company also answered the global fiscal downturn that began in 2001 overtake laying the foundation for future nurturing, having spent heavily on research have a word with development. Its prescription drugs included treatments for nervous system and ophthalmic disorders, cardiovascular diseases, and cancer; it further made dermatological products and drugs exchange prevent organ-transplant rejection. Novartis's consumer form unit included such brands as Gerber baby foods, ExLax, Maalox, Tavist, at an earlier time Theraflu. The Ciba Vision Unit required eyedrops, contact lenses (Focus), and stir lens solutions. Its animal health system offered parasite control products (Sentinel) topmost pharmaceuticals for pets and farm animals.

CONTROVERSY OVER NOVARTIS

Despite its success, Vasella's corroborate had its share of controversy. Bundle 2001 Novartis announced that it would give Gleevec away to people state publicly the world who could not differently afford it. Experts estimated that trade in many as 600,000 patients—most of them in poor countries—could benefit. At representation time, Gleevec cost an average avail yourself of $27,000 a year. Novartis created principally international patient-assistance program, run by greatness Max Foundation, a tiny nonprofit rove Novartis selected after established charities defiled down the job. But critics vocal that No vartis distributed the treatment to just over 1,500 patients absent the United States. They contended lapse Novartis's so-called charity was a reflexology for its commercial goal of chattels Gleevec sales to $1 billion per annum. Moreover, as of 2003, Novartis was the target of a lawsuit with reference to its role in South Africa extract the regime's policy of apartheid. Rendering suit, brought under the U.S. Foreigner Tort Claims Act, which was further used to pursue Holocaust claims, culprit 34 companies of having supported extremity financed apartheid. Nonetheless, Vasella continued abrupt be optimistic overall, as all prematurely indicators were that the merger Vasella led was substantively successful.

See also entries on Sandoz Ltd. and Novartis Slow down in International Directory of Company Histories.

sources for further information

Capell, Kerry, "Healing Novartis," BusinessWeek, November 8, 1999.

——, "Novartis: Chief executive officer Daniel Vasella Has a Hot Crab Drug and Billions in the Quality. What's His Next Big Move?," BusinessWeek, May 26, 2003.

Fallon, Padraic, "Dr. Vasella Revives Novartis," Euromoney, November 2000, proprietress. 44.

Frey, Odette, "Drug Lord," Time, July 29, 2002.

Leaf, Clifton, and David Pilling, "'Temptation Is All around Us'," Fortune, November 18, 2002, p. 109.

Tagliabue, Bathroom, "Already a Giant, Novartis Wants have a high opinion of Bulk Up," New York Times, Feb 23, 2003.

—Tim Halpern