Novartis AG announced the surprise departure of Chief Executive Officer Joseph Jimenez after eight years at the helm of Europe’s largest drugmaker, during which time he reshaped the company with asset swaps and prepared the sale of underperforming divisions.
Vasant Narasimhan, the chief medical officer and global head of drug development, will succeed Jimenez from Feb. 1, Novartis said in a statement on Monday. Jimenez, 57, who will retire at the end of January, said his family is ready to return to Silicon Valley after spending 10 years in Switzerland.
Jimenez is handing over the reins to a behemoth that includes the struggling Alcon eye-care business and a stake in crosstown rival Roche Holding AG. The former H.J. Heinz Co. executive, who had no scientific background before joining Novartis, reshaped the drugmaker by acquiring GlaxoSmithKline Plc’s mature cancer drugs portfolio and offloading a vaccines business. Last week, in partnership with Narasimhan, he beat out rivals in a fierce competition to win U.S. regulatory clearance for a $475,000 breakthrough oncology therapy.
“I’ve been CEO for eight years and I’ve been pretty public about the fact that I didn’t think a CEO should stay much longer than that,” Jimenez said on a call. “You come in, you see what you want to change, you change it, and then it’s time to pass it on to a successor.”
Shares of Novartis fell 0.4 percent to 80.50 Swiss francs as of 9:12 a.m. in Zurich trading. During Jimenez’s tenure, the stock returned 8.8 percent annually, compared with a 13 percent annual return for the Bloomberg Europe Pharmaceutical Index.
Jimenez in July reiterated his confidence in returning the Swiss drugmaker to growth next year. The drugmaker posted a smaller decline in second-quarter earnings than analysts had projected as newer medicines helped offset the eroding sales of its biggest drug.
Novartis is trying to turn around Alcon and is reviewing options including a spinoff or initial public offering for the division. The company is also turning to newer medicines such as heart drug Entresto, psoriasis treatment Cosentyx and Kisqali for breast cancer to help counter a decline in sales of its best-selling cancer product Gleevec, which is losing the ground to cheaper copycat drugs.
Narasimhan, born in 1976, prior to his current role served as head of development for Novartis Pharmaceuticals. Before joining Novartis in 2005, he worked at McKinsey & Co. He received his medical degree from Harvard Medical School in the U.S. and obtained a master’s degree in public policy from Harvard’s John F. Kennedy School of Government. He holds a bachelor’s degree in biological sciences from the University of Chicago.
“The Board of Directors is confident that Vas is the right choice to lead Novartis on our expected next growth phase, driving innovation and further strengthening our competitive position,” Chairman Joerg Reinhardt said.
Jimenez said his children have grown up and moved back to California, prompting his decision to follow them. His home state also provides great opportunities to pursue his interest in the intersection between biology and technology, he said.
— With assistance by Kanoko Matsuyama, and Phil Serafino