Novartis AG (ADR) (NYSE:NVS)’s long serving chairman, Daniel Vasella, will be stepping down next month after serving the company for 25 years, the company revealed this along with its fourth quarter earnings. Daniel Vasella helped create the Swiss drug giant through a big merger in 1996.
The drug company is appointing Joerg Reinhardt, chief executive of Bayer Healthcare and a one-time contender for the Novartis CEO Job, as the company’s new chairman. After the shareholders approval, Reinhardt will exit his Bayer post in August, Novartis said. Joe Jimenez will retain his position as Novartis chief executive, and vice chairman, Ulrich Lehner, will head the board until Reinhardt finally joins the company, likely in August.
Dr. Vasella, 59, without revealing his future plans, said “Novartis AG (ADR) (NYSE:NVS) is solidly on course to navigate the volatility and uncertainties of today’s economic environment,” he said in a statement. “I am confident in the leadership of Joe Jimenez and his top team, the company’s strategy with its commitment to innovation, and the course charted to strengthen Novartis as one of world’s leading health-care companies. I have therefore concluded that after 25 years with the company, the time is right for me to ensure a smooth transition.”
Dr. Vasella helped to establish Novartis AG (ADR) (NYSE:NVS), through a merger of Sandoz and Ciba-Geigy in 1996. Under his leadership, the company sold non-health-care businesses and invested billions of dollars to foray into new areas of health care, including vaccines, generic drugs and eye care. In 2010, he stepped down from the post of chief executive, but remained as chairman.
The Swiss drug giant also announced a rise in its fourth quarter net profit, but reported flat sales owing to competition from cheaper drugs and price cuts. Net profit for the quarter jumped to $2.05 billion from $1.18 billion in the same quarter last year. Net sales for the quarter were flat at $14.83 billion.
“After our 2013 patent expirations are behind us, our relentless focus on innovation, growth, and productivity is expected to result in group net sales growth of at least mid-single digits in both 2014 and 2015, with core operating income growing ahead of sales,” Mr. Jimenez said in a statement.
Recently, the drug giant has been adversely affected by the loss of patent protection for its success full heart drug Diovan. The company expects its 2013 sales to be in line withthat of 2012, factoring the impact of generic competition, which could amount to as much as $3.5 billion.