Lek CEO: Innovation Drives Novartis' Growth (Interview)

By , 19 Feb 2019, 10:25 AM Business
Zvone Bogdanovski Zvone Bogdanovski lek.si

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STA, 17 February 2019 - Innovation is the main engine of Novartis's growth and Slovenia will continue to play a crucial role in innovative technologies, chairman of Novartis-owned pharma company Lek, Zvone Bogdanovski, told the STA in an interview. He highlighted Lek's centre for the production of active substances for innovative medicines in Mengeš.

The pharmaceutical industry is undergoing many changes due to digitalisation and population ageing, and Novartis is responding with a new strategy that focusses on the core business, optimisation, investment in ground-breaking transformative therapies and increasing profitability, Bogdanovski said.

Novartis, which owns Lek, Novartis Pharma Services and Sandoz in Slovenia, is betting on innovation. The Swiss multinational has decided to focus on individualised therapies - cell and gene therapy, and the radionuclide therapy used in cancer treatment, which are costly but effective.

"That's the future, not just for Novartis, but for the entire pharmaceutical industry," the Lek CEO said, adding that the future was also in digitalisation underpinned by big-data analysis, artificial intelligence and biological simulations, which could gradually replace clinical studies.

Novartis's generics division, Sandoz, aims to become a leading producer of generic biological drugs, differentiated generic drugs, drugs with added value and a leader in digital therapeutics, Bogdanovski said.

Since competition in generics is tough, "we won't play where we're not competitive, it does not make sense to slowly wither away."

Bogdanovski believes specialised products with high added value produced on a lower scale are the future. "We're not running away from basic generics, we're only shifting our focus."

He gave a drug that was developed in Prevalje last year, a child-friendly, rapidly dissolving Amoksiklav pill, as an example of Sandoz's drug with high added value. "These are the things we'll be working on in the future," he said.

"The pressure on prices is a global fact, so we're increasing our efficiency and productivity in Slovenia as well."

Sandoz and Novartis appreciate the Slovenian know-how and experience. "So far, we've proved we can master certain ground-breaking technologies and contribute to further growth."

Bogdanovski pointed to the construction of the EUR 38m facility for the production of new biological drugs in Mengeš north of Ljubljana, which is to become operational in a year and a half. "This puts us on Novartis's map as a centre for biotechnology."

Ljubljana boasts one of Sandoz's leading development centres. "It's the largest and best equipped development centre that Sandoz has. The knowledge of the experts working there is exceptional. The centre creates more than 20 new molecules a year and launches them around the world. In recent years, we're talking about over a hundred of the most demanding new drugs."

In Prevalje, where Sandoz has a production facility for its flagship product Amoksiklav, a new factory has been built, but is currently on hold. The decision on the continuation of the project in Prevalje has not been made yet but everything should be clear in the coming months.

Last year, two famous brands of Lek's over-the-counter drugs, Persen and Neopersen, were sold to Alvogen, a US pharmaceutical company, but Bogdanovski could not speak of any other potential sales.

"Sandoz's focus is on biosimilars, crucial generic products with high added value, so on the areas we are good at, where we have a competitive edge and cover the key therapeutic areas."

Bogdanovski also said that the sale of Persen and Neopersen and the separation of the generics section in the US were not in preparation for the sale of Sandoz.

While he would not reveal last year's results of Novartis in Slovenia, Bogdanovski said that both revenue and profit were projected to have increased.

With more than 70 drugs in haematology, oncology, cardiology, immunology, dermatology, neurology, pulmonology and ophthalmology, Novartis held a 14.8% market share on the Slovenian pharmaceuticals market last year.

"We're second biggest provider of generic prescription drugs and we're the leader in over-the-counter drugs," Bogdanovski said.

Novartis employed 4,152 people in Slovenia last year, which is 370 more than in 2017. In the last seven years, the headcount increased by more than 2,000.

All our stories on the pharmaceutical industry in Slovenia can be found here

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