Novartis Korea to close down Respiratory BU next month

as part of global reorganization

Reorganizes into 5 divisions through mergers and closures of business units... will get rid of Respiratory products

May hand over licenses of products that render insignificant sales, such as Atectura Enerzair, etc.

Respiratory unit personnel to be reassigned to other units...some apply for early retirement

Novartis Korea is expected to close down its Respiratory Business Unit and dispose of related products from October this year.

 

According to industry sources on the 14th, Novartis Korea’s Respiratory Business Unit will be officially closed down next month as part of the company’s large-scale reorganization in progress at the global level.

 

Currently, Novartis Korea is operated in two business units - Pharmaceuticals BU and Oncology BU.

 

The Pharmaceuticals BU consists of Cardiovascular & Metabolic Diseases; Autoimmunity, Transplantation & Inflammatory Diseases; Skin Diseases.

 

The global reorganization is being made to first integrate the Pharmaceuticals and Oncology Business Units and then divide them into an Innovative Medicines (IM) Division and an off-patent drug division.

 

Specifically, as of October this year, Novartis Korea will be reorganized into 5 Business Units, ▲Hematology, ▲Solid Tumor, ▲CV & GTX, ▲Immunology, and ▲ In-Market & Business Innovation.

 

The unit that had been in charge of respiratory diseases has been removed in the process.

 

Novartis’s respiratory pipeline consists of ‘Enerzair (indacaterol/glycopyrronium/mometasone),’ a three-drug combination drug for asthma, and ‘Atectura (indacaterol acetate/mometasone),’ a once-daily fixed-dose combination drug.

 

Both drugs are fairly new in the market, being approved in December 2020 and granted reimbursement in September last year.

 

However, sales of the two drugs have been low, making around KRW 800 million in 1H this year.

 

The company is speculated to have made this decision after judging that the growth potential of its respiratory treatments is low.

 

Xolair, Novartis Korea’s highest-grossing asthma treatment, was allocated to the Immunology BU due to its mechanism of action and excluded from the restructuring process.

 

When a dedicated unit is shut down, products in its care may be transferred outside.

 

However, due to the small sales volume of the relevant products, their effect on the company's aggregate sales is expected to be negligible even with such a transfer.

 

Employees in the Respiratory BU will also be reassigned.

 

According to a Novartis Korea employee, the Respiratory Unit has around 10 people, including those in charge of marketing and sales.

 

With the shutdown of the Respiratory BU, about 30% of them are known to have applied for voluntary retirement (ERP) that is being offered by the company.

 

Novartis Korea said, “We are in the process of reorganizing our business units to focus on our core therapeutic areas in line with the strategic direction taken by our headquarters.

 

Employees in our Respiratory BU that apply for voluntary retirement will go through relevant procedures, and those who do not will be reassigned to other departments according to their wishes and business needs.”