How Gal appointment could influence strategy at Novartis

The departure of Ronny Gal, one of the sellside’s most respected and opinionated analysts, from Bernstein to become Novartis’s chief strategy and growth officer will have many investors reading the tea leaves today. Clues might be found in some of Mr Gal’s pronouncements over his 18 years at the investment bank. One of his biggest bugbears, for instance, was the lack of US drug pricing competition. In a famous open letter last April Mr Gal had urged Regeneron to “be first in discounting PD-1s”, saying Libtayo should be discounted to boost market share and give it a “brand halo” – words that the drug maker did not heed. Novartis/Beigene’s tislelizumab is awaiting US approval, though whether it can make an impact on a large indication is up in the air. Mr Gal has also looked at ways to improve uptake of biosimilars – an area where the poor progress of Novartis’s Sandoz has contributed to the sale of this division being considered. But perhaps the hottest topic will be M&A; earlier this year Mr Gal wrote that the small/mid-cap sector’s decline put it in the acquisition frame, and suggested protein degradation as the next target for pharma.

Selected US indications for Beigene/Novartis's tislelizumab (VDT482)
Indication Status Supporting trial
2nd-line oesophageal squamous cell carcinoma US Pdufa date Jul 12, 2022 Rationale-302
2nd-line NSCLC Awaiting EU approval; possible US filing Rationale-303
1st-line squamous NSCLC (chemo combo) Awaiting EU approval Rationale-307 (China only)
1st-line non-squamous NSCLC (chemo combo) Awaiting EU approval Rationale-304 (China only)
2nd-line oesophageal squamous cell carcinoma Awaiting EU approval Rationale-302
1st-line nasopharyngeal carcinoma First filing due 2022 Rationale-309
Source: Evaluate Vantage.

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