Novartis Announces Major Layoffs Amid Cardiovascular Portfolio Restructuring

Novartis, the Swiss pharmaceutical giant, is set to implement significant changes to its cardiovascular commercialization model, resulting in the layoff of 427 employees at its U.S. headquarters in East Hanover, New Jersey. The restructuring comes as the company prepares for the looming patent expiration of its blockbuster heart medication, Entresto, while simultaneously focusing on the growth of newer products like Leqvio and the potential launch of pelacarsen.

Entresto Patent Cliff Sparks Strategic Shift

Entresto, a key revenue driver for Novartis with $4.05 billion in U.S. sales in 2024, faces patent expiration in July 2025. The company is bracing for the loss of market exclusivity, which has prompted a series of legal battles with generic manufacturers. Despite winning a partial victory in court to block the launch of MSN Pharmaceuticals' generic version, Novartis is preparing for increased competition in the heart failure treatment market.

The restructuring of Novartis' cardiovascular commercial operations is designed to "simplify and strengthen" customer interactions, according to a company spokesperson. The new structure is set to be implemented on April 1, with affected employees encouraged to apply for positions in other areas of the company.

Focus on Growth and New Product Launches

While Entresto's patent cliff looms, Novartis is shifting its focus to newer products in its cardiovascular portfolio. Leqvio, approved in December 2021 for lowering cholesterol levels, has shown impressive growth with $754 million in total sales last year, a 114% increase at constant currencies compared to 2023.

The company is also looking ahead to potential new product launches, including pelacarsen, currently in phase 3 trials for patients with elevated lipoprotein(a) levels. This experimental drug represents Novartis' efforts to expand its presence in the cardiovascular disease market beyond traditional heart failure treatments.

Legal Battles and Generic Competition

Novartis has been actively engaged in patent litigation to protect Entresto's market position. The company has filed lawsuits against multiple generic manufacturers, including Torrent, Dr. Reddy's Laboratories, Zydus, MSN Pharmaceuticals, Alkem, and Lupin, all of which have received FDA approvals for their Entresto copycats.

In a recent legal victory, a federal judge in New Jersey granted Novartis a preliminary injunction to block the launch of MSN's generic version, citing similarities in pill design. However, the judge did not support Novartis' claim that the generic's brand name, Novadoz, was intentionally similar to Novartis or its generic spinoff, Sandoz.

As Novartis navigates these challenges, the pharmaceutical industry watches closely to see how the company will maintain its position in the competitive cardiovascular market while adapting to the loss of exclusivity for its top-selling heart medication.