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Leading Innovation

09/13/2006 5:00 PM E51-115 Wong
Daniel Vasella, Chairman and CEO Novartis

Description: Since innovation is -not necessarily always predictable,” Daniel Vasella declines to discuss it in a systematic way, and instead, focuses on a case study of one of his company's flagship pharmaceuticals, Gleevec. The discovery, development and marketing of this drug, which fights the rare chronic myeloid leukemia (CML), may point to some of the things Novartis does right, suggests Vasella. Many significant drugs result from years of basic research that takes place outside of industry. Pathbreaking work that occurred decades ago uncovered chromosome damage in patients with CML, and revealed an abnormal protein secreted due to this mutation. In the early 1990s, Novartis began the creative work of trying to block the signal of this cancer-causing protein. After testing numerous compounds, Gleevec was synthesized in 1992, and -then the problems started,” says Vasella. When the drug was delivered intravenously, there were toxic effects, and they couldn't reproduce results from cell cultures. With 100 researchers laboring on the problem, recounts Vasella, -marketing said, 'stop this damn thing.'” Despite the setbacks, -We persisted,” says Vasella. Indeed, the first clinical human trials, on 31 patients, were so spectacular -- 100% remission rates -- that Vasella didn't believe the data. The company moved into frenetic pitch to complete the additional clinical trials necessary for FDA approval, and then on to production. Employees volunteered to work in 24-hour shifts, seven days a week. Vasella faced another issue: -We had to come up with a way we'd make money,” since CML affected a relative handful of patients globally. And the fewer the patients, the higher the price of the drug, potentially keeping it out of the hands of those who most needed it. The company decided to subsidize the cost of Gleevec for patients of little means. In spite of this, Gleevec -has surpassed all expectations.” Sales this year alone will exceed $2.4 billion. What elements might have led to this triumph and Novartis' more recent successes? Vasella cites -intrinsic motivation” in each Novartis staff member, high standards, savvy risk-taking and persistence in both research and marketing, and a company culture that brings out the best in everyone.

About the Speaker(s): Daniel Vasella, M.D., was appointed Chairman in April 1999, having served as CEO and Head of the Group Executive Committee since the merger that created Novartis in 1996. Previously, Vasella was CEO of Sandoz Pharma Ltd. and a member of the Sandoz Group Executive Committee.

Vasella created the Novartis Institute for BioMedical Research and moved the company's research headquarters to Cambridge, Massachusetts, to be closer to top scientific talent as well as patient and hospital networks. He also established The Genomics Institute of the Novartis Research Foundation, which is focused on developing therapeutics from the data generated from the mapping of the human genome.

Vasella has implemented pioneering initiatives to ensure access to medicines, which include the founding of the Novartis Institute for Tropical Diseases for research on neglected diseases of the developing world, and the International Patient Assistance Program for the breakthrough cancer drug GleevecÂ/GlivecÈ, an agreement to supply the novel malaria treatment Coartem at cost to the World Health Organization and a pledge to donate the drug therapy needed to eradicate leprosy worldwide.

In 2003, Vasella was awarded The CancerCare Human Services Award and also the Harvard Business School's Alumni Achievement Award. He holds the rank of Chevalier in the Ordre National de la L_gion d'Honneur (France). Vasella is a member of the Board of Directors of PepsiCo, Inc., United States. In addition, he is a member of the Board of Dean's Advisors at the Harvard Business School. He is also President of the International Federation of Pharmaceutical Manufacturers Associations.

Host(s): Sloan School of Management, MIT Sloan School of Management

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MIT World — special events and lectures

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