Novartis Pipeline: A Good Fit But Cuts Are Expected

The merger of Ciba and Sandoz has created a new entity, Novartis, with a drug pipeline full of impressive numbers; 43 new products and line extensions in Phase III and a combined R&D spend of around 2 billion Swiss francs ($1.66 billion; 18% of prescription pharmaceutical sales). But size does not necessarily mean quality, and the two companies have not been noted for their innovation in recent years.

Nevertheless, analysts have responded to the merger favorably, both for its financial sense and the therapeutic, geographic and research fit of the Ciba and Sandoz product lines. There does not appear to be any significant overlap; Sandoz' main strengths have been in immunology and antifungal drugs, while Ciba has focused primarily on areas such as cardiovascular disease and arthritis. Both have useful and complementary central nervous system portfolios, especially in epilepsy and schizophrenia, which could make this a core franchise for Novartis.

Overall, the new company will have research interests in seven therapeutic areas, namely immunology and inflammatory disease, CNS disorders, cardiovascular, endocrine and metabolic disease, oncology, dermatology and respiratory (asthma). There are a total of 94 projects in development, and the most significant are listed in the accompanying table.