Showing posts with label Novartis. Show all posts
Showing posts with label Novartis. Show all posts

Thursday, January 28, 2016

Big Investor Pushes Underperforming J&J To Step Up Or Split

fiercepharma
January 28, 2016 | By 

 Split 'em up, move 'em out.

Should Johnson & Johnson ($JNJ) join the Big Pharma split-up club? One of its major shareholders thinks so, and it's pressing activist investors to join the cause.
Artisan Partners has a short list of suggestions for the healthcare conglomerate, including a three-way split. The firm also urges J&J execs to consider revamping the board, rejigging executive pay and opening up its finances to greater scrutiny.

Right now, J&J is trading at a "significant conglomerate discount," the firm said in a presentation posted online Thursday morning--a $90 billion discount, it figures. The company's already well-defined units would be better off as standalone businesses--consumer products, medical devices and pharmaceuticals.

It's not an original idea; CNBC's Jim Cramer suggested last year that an activist investor might step up and fight for a split. He figured that J&J would be worth 50% more in three pieces than the whole was at the time. "I don't care how big JNJ is, this one's ripe for the prodding," Cramer said.
And Cramer's advice followed pressure from at least one big-name analyst. In mid-2012, as Pfizer ($PFE) was moving into split-up mode, Goldman Sachs' Jami Rubin told investors that J&J chief Alex Gorsky, then fairly new in the job, should consider a three-way breakup. One of her points: The medical devices division was underperforming and dragging down the rest of the company.

Of course, that hasn't changed much; the unit has fallen on such hard times that J&J now says it will restructure the business and lay off 3,000 people.

Artisan has similar arguments. The firm said J&J has significantly underperformed its head-to-head peers in each of its three businesses, and its conglomerate structure drags down its stock compared with those rivals. Even its top-performing business--prescription drugs--isn't on par with Big Pharma.

Why? "[I]nadequate execution and poor operating performance on a number of fronts," Artisan says. Its capital investments--including M&A spending--haven't delivered big enough returns. Also, J&J's executive pay plans are flawed--Artisan says Gorsky is overpaid compared to other, better-performing biopharma CEOS--partly because its financial reports aren't as transparent as they should be.

The firm urged J&J to consider bringing new blood onto its board, saying that there's a "notable lack" of actual industry experience there.

Last year at the J.P. Morgan Healthcare Conference, Gorsky seemed to hint that J&J was open to hiving off some of its weaker parts. "We think it's important to be very thoughtful about where we're going to participate and where we're not going to participate," he told presentation watchers in San Francisco. "If we're not a No. 1 or No. 2 in a particular area, if we don't see a path to achieving leadership, … then that's maybe better served in someone else's hands."

Still, J&J has long defended its conglomerate structure, almost as sacred at the company as its oft-quoted credo. During Tuesday's earnings call with analysts, Gorsky said the company's "broad-based structure" has helped "deliver strong, consistent and sustainable financial performance."

But that's exactly what the split-up fans dispute. And the diversified structure is falling out of favor across Big Pharma, as companies spin off, sell or swap their lesser-performing units to focus on their strengths.

Pfizer's long-anticipated divorce, which would split its established products business off from its "innovative core" of newer brands and pipeline drugs, is the leading example, though still uncertain, not to mention a couple of years off. But a long list of current deals fits this mold, from Novartis ($NVS) and GlaxoSmithKline's ($GSK) oncology-for-vaccines swap last year, to Merck & Co.'s ($MRK) consumer health sale to Bayer, to Sanofi's ($SNY) in-the-works trade with Boehringer Ingelheim, which would strengthen the French drugmaker's consumer business and send its animal health unit to Boehringer.

Neil Woodford
Then there's GSK, which is under its own pressure from U.K. investors to break up into several pieces. Top fund manager Neil Woodford has said GSK operates like four different publicly traded companies under one roof, an approach that all but guarantees poor management and hampers the growth in each of them.

Artisan figures that a three-way split at J&J would create up to $90 billion in new value, about one-third of the company's current market cap of $282 billion. That 30% or so increase isn't as much as Cramer calculated. But it might be enough to get some activist investors excited.
- read Artisan's prescription for J&J

Editor's note: This story was updated with details from Artisan's investor presentation.

Thank You Ms Staton and FiercePharma


J&J would create up to $90 billion in new value, about one-third of the company's current market cap of $282 billion.

Uh huh.


Well, the Obama DOJ certainly taught Them a lesson they won't forget.








Wouldn't want Doc nodding off on the job without their coffee. 


Got drugs, real diseases, and premature death to push, . . . and strung out thought criminals to police.

Experts Decry Dangerous Use Of Antipsychotics In Children

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Thursday, June 27, 2013

20 Highest Paid Biopharma CEOs of 2012

Fierce Pharma has;
20 Highest Paid Biopharma CEOs of 2012
by Tracy Staton
Call it a rite of spring. Every year about this time, FiercePharma takes a look at executive compensation in the industry, and we rank the highest-paid CEOs. If you're a regular reader, you'll notice that this year's list is longer than previous editions. And there's a reason for that: curiosity.

 As we were beginning to gather numbers from biopharma companies' proxy statements and annual reports, news surfaced that Valeant Pharmaceuticals ($VRX) and Actavis ($ACT) had been in merger talks. The former CEO of Mylan ($MYL), one of Actavis' rivals, regularly appeared on our highest-paid executives list, so we looked up the numbers on Actavis. No dice; CEO Paul Bisaromay have pulled off his biggest merger ever last year, but $8.66 million in compensation still didn't qualify him for our ranking.

 Then, we pulled out Valeant's proxy statement. And while CEO Michael Pearson didn't earn enough in 2012 to make the cutoff--his compensation just surpassed $6 million--he should have been at the top of the list last year. Pearson's 2011 pay package broke $36 million. He collected more than $18 million in stock and option awards, plus a special $13.7 million dividend payment, stemming from agreements negotiated years before.

 We hate to miss a scoop. Naturally. So, we vowed to avoid making the same mistake this time around. Rather than limit our executive-pay search to the biggest pharma companies and biotechs, plus the usual suspects who often make CEO-pay rankings, we used a bigger net. We collected compensation information from 50 companies, including numbers for CEOs, CFOs, R&D chiefs and other top executives.

 Partly because of this search, but mostly because of big bonuses and awards at fast-growing Regeneron ($REGN), we have a brand-new No. 1 on our list. That's Regeneron CEO Leonard Schleifer, whose 2012 compensation totaled $30.047 million. You'll notice some other newbies, such as Leonard Bell from Alexion ($ALXN), whose pay bump put him in 12th place. And then there are familiar faces, such as Pfizer ($PFE) CEO Ian Read; Johnson & Johnson's ($JNJ) former chairman and CEO, William Weldon; and Eli Lilly ($LLY) CEO John Lechleiter, who hung on in 10th place.

 Many of the companies we researched pay their top people far less than the $10 million that served as our cutoff figure. Novo Nordisk ($NVO) CEO Lars Sorensen, who has presided over double-digit growth there for several years, collected a package of cash and stock awards worth about $5 million for 2012. GlaxoSmithKline ($GSK) CEO Andrew Witty made less than $6 million himself; he took a pay cut for the year because of Glaxo's shortfall on certain performance targets.
And then there are others who would have made the list, had their titles been different. There's Regeneron R&D chief George Yancopoulos, whose extraordinary $81 million in compensation shows how much the company appreciates its newly minted blockbuster, Eylea. There's Mylan Chairman Robert Coury, who used to be a fixture on our list until Heather Bresch took over as CEO; he made more than $28 million last year. Novartis' ($NVS) former chairman Daniel Vasella could have qualified for 12th place with his $13.98 million in compensation.

 Vasella, then, gives us a quick segue to the ongoing debate over executive pay. In Switzerland, populist dismay at some high-profile compensation figures led to a public vote earlier this year. Citizens voted in new restrictions on common bonuses, such as golden parachutes, and gave shareholders a binding vote on executive pay. And local analysts figure that late-breaking news of Vasella's behind-the-scenes noncompete agreement--worth some $78 million over 5 years--helped pay activists to get out the vote. (Vasella ended up refusing the deal, by the way.)

 In the U.S., where executives are paid more than anywhere else in the world, shareholders at some companies have successfully lobbied for a greater emphasis on performance pay and against extraordinary bonuses, such as change-in-control payments that send top executives on their way with tens of millions after a merger. Other companies have instituted "say-on-pay" advisory votes for shareholders, but those often end up as rubber stamps for the status quo.

 Now, we're interested in what you have to say about executive compensation. Are the CEOs on this list worth their price? What's a supersuccessful new drug worth? Should CEO pay be docked for R&D failures? What about failed launches? Should other, lower-paid executives earn more? Tweet your opinions to @FiercePharma using the hashtag #FPexecpay, leave your comments below or email us. We'll collect your thoughts in a future article.

 As always, feel free to send us your thoughts on our coverage. And if we missed a well-paid CEO, be sure to let us know.

 -- Tracy Staton (email | Twitter)

 For more:
Top 10 Biotech CEO Pay Packages of 2012
Top 10 Pharma CEO salaries of 2010
Top 10 Pharma CEO salaries of 2009
2012's 10 highest-paid Med Tech CEOs
Top 10 Medical Device Industry CEO Salaries for 2011
Thank You Fierce Pharma and Ms Staton.
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Saturday, June 1, 2013

Feud At FDA As Staffer's Safety Review Bucks Agency Line

FiercePharma has;
Feud At FDA As Staffer's Safety Review Bucks Agency Line
May 31, 2013 | By 
Outspoken FDA scientist Thomas Marciniak is stirring the pot again. This time, his target is angiotensin receptor blockers, or ARBs, taken by millions of people for high blood pressure, The Wall Street Journal reports. And his superiors at the agency are having none of it.

 Here's the background: A 2010 study concluded that ARBs, which include Novartis' ($NVS) Diovan and Merck's ($MRK) Cozaar, increased patients' cancer risk markedly. The red flag flew highest in lung cancer; The Lancet's study concluded that ARB users had a 25% greater risk of that type of cancer.

 FDA commenced its own safety review. By 2011, it had concluded that ARBs did not cause an increase in cancer risk. But Marciniak disputed that conclusion, saying it was based on data summaries provided by the drugmakers. He dug into patient-level data on his own initiative--and found an increase in lung cancer risk of 24%, about the same as The Lancet study.

 "The FDA needs to inform patients and physicians about the ARB lung-cancer risks," Marciniak told senior agency officials in a memo (as quoted by the WSJ). "The FDA must act now."

 Agency brass are telling Marciniak to leave it alone. But he's not one to keep silent about perceived safety risks. He went maverick at a hearing on the now-resctricted diabetes drug Avandia, questioning the RECORD safety study that comes up for another airing next week. He pointed out a potential link between the bloodthinner Effient and cancer; in that case agency reviewers also disagreed, and the potential risks were chalked up to chance. A subsequent Archives of Internal Medicine study found Effient users saw higher rates of cancer than Plavix patients did.

 Now, Marciniak's boss, Ellis Unger, tells the WSJ that there's nothing new to tell the public about ARB safety. Unger disputes Marciniak's methods, too; he told the WSJ that using patient-level data may lead to overcounting cancer cases, because some ailments that weren't actually cancer could be included.

 The ARB class is a big one, with more than $7 billion in 2012 sales. Several of its members, including Diovan and Forest Laboratories' ($FRX) Benicar, made FiercePharma's recent ranking of top cardio drugs. They've also been on the market long enough for some patents to have expired. With so much history under their belts, ARBs might seem an unlikely target.

 As the WSJ points out, FDA's reluctance to allow Marciniak to dig through the ARB data, couched as it was as a time-constraint issue, raises the question of whether the agency is too focused on newer drugs' safety.

 With another FDA panel hearing next week on Avandia, whose safety saga stretches back more than 5 years, that's debatable. The agency itself has been working on some database-monitoring programs to help flag safety problems in older meds. But those are in their early stages. And for now, FDA's attention--and limited resources--may gravitate toward big public scandals, like Avandia, taking efforts away from routine investigation of long-marketed drugs. With more budget cuts likely on their way, under a newly unveiled White House budget report, the FDA's resources will be in even shorter supply.

 - see the WSJ story
- get more from Forbes

 Special Report: Top 10 Cardio Drugs 2012
Related Articles:
FDA review backs Xarelto for big new use in ACS patients
Study: Lilly's Effient linked to higher cancer risk
Live from FDA: Nissen speaks on Avandia


Thank You FiercePharma and Ms Staton
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