Novartis stock prices remain better than other blue chip companies
The shares of pharmaceutical company Novartis fell due to a weak overall market at the beginning of this week. However, they still remained higher than most of the other blue chip companies.
On Monday morning, the Basel company announced an upcoming change in the corporate group leadership, which came as a surprise to many. According to traders, this change in leadership could suggest bigger changes in the future.
Share in Novartis fell by 0,3 per cent to 80.60 Swiss francs on Monday (9.30am). A tenth of the average daily volume was traded. Because of the North Korea crisis, the overall market SMI fell by 0,5 per cent.
Louis Erard, Hermès, and Fossil leave Baselworld
The Jura-based watch brand Louis Erard will not be exhibiting at the next Baselworld. Director Alain Spinedi justified his company’s decision to leave the Basel watch and jewellery exhibition as a “change in strategy”.
In a Monday interview with the Swiss newspaper “L’Agefi”, Mr Spinedi stated that the Baselworld no longer not fitted into the concept of the Louis Erard brand. During the exhibition, enthusiasm would lead to many purchases. This in turn results in problems when launching new products, he added.
The watch manufacturer, with its headquarters in Noirmont in the canton of Jura, wants to position itself more closely to retail traders and meet their specific requirements. Mr Spinedi also said that his company aims to promote the special features of the brand more clearly. Louis Erard plans to launch new campaigns and achieve more publicity.
According to Mr Spinedi, they received fewer orders at Baselworld 2017 than in previous years. However, he did not want to criticise the exhibition itself: thanks to the Baselworld, Louis Erard has been able to position itself as an alternative to the large-scale watch market, he said.
The Jura-based watch brand is not the only one leaving the Baselworld. The French luxury brand Hermès as well as the US brand Fossil no longer want to exhibit their wares in Basel.
The Baselworld celebrated its 100-year anniversary in 2017. Instead of 1,500 exhibitors as in 2016, only 1,300 companies presented their products in the exhibition halls at the Messe Basel this year. The admission criteria had become stricter.
The Baselworld management has this year launched “Les Ateliers” to attract new exhibitors. Independent watch brands can present their products in this section. The next Baselworld is on from 22nd to 28th March 2018.
Novartis CEO Joe Jimenez to resign in 2018
The Basel pharmaceutical company Novartis will receive a new young CEO in early 2018. Vasant Narisimhan (born in 1976) will take over from Joe Jimenez on 1st February. He is currently head of medication development in the corporate group.
New CEO won’t change Novartis strategy for now
There will be no immediate changes in the pharmaceutical company’s strategy with the new CEO, Vasant Narisimhan, the firm has confirmed. The future of eye health division Alcon also remains open. All options are still under consideration – from keeping to selling this division.
Alcon – the “problem child” of Novartis – will continue to be tested with strategies, Novartis announced in a telephone conference on Monday. The corporate group will announce the state of play at the end of this year.
The group put the eye division under scrutiny in early 2017. The possibilities discussed included flotation, a sale to a third party, or remaining as a division within Novartis.
Mr Jimenez denied that the frictions surrounding Alcon led to his resignation. “I have been CEO for eight years – no corporate head should stay longer,” he said. The reason for his resignation was rather the renewed growth of Novartis, which Mr Jimenez expects as of next year. A new CEO should be part of this growth from the start, the 57-year-old said.
Further investments in Switzerland
The Novartis management was also asked whether the company’s acquisition policy, which had been rather reluctant under Mr Jimenez, would receive new dynamics with his successor, Mr Narasimhan. “For the moment, no change in strategy is planned,” Jörg Reinhardt, head of the administrative council, insisted.
According to Mr Narasimhan, one of Novartis’ biggest strengths is innovation. The American explained that turning the achievements of research and development into a commercial success would be one of his major challenges as CEO.
Novartis remains loyal to its position in Switzerland and particularly in Basel under the new CEO. As long as the region remains competitive, he said it will continue to invest in Switzerland.
Mr Jimenez will officially stand down from his position on 31st January 2018 but will continues to support the management in an advisory role until 31st August.
Vasant Narasimhan is member of the Novartis management and has been working for the company since 2005, according to a statement from the pharmaceutical concern, released on Monday. Before this, he worked for consultancy firm McKinsey & Company. Mr Narasimhan is an American citizen and lives in Basel with his wife and two children.
The future Novartis CEO completed his studies in medicine at Harvard Medical School. In addition, he has a Master in Public Policy from the John F. Kennedy School of Government at Harvard.
“Vas has deep roots in medical research and comprehensive experience in the coordination of research and development with marketing and revenue,” Jörg Reinhardt said in the Monday announcement.
Mr Narasimhan also has “a marked sense for business and a remarkable track record”. As a doctor, he distinguishes himself by a strong patient-centred care, a genuinely human perspective, and personal engagement, it was stated further.
In his own words, Mr Narasimhan said: “I feel honoured to have been offered the leadership of Novartis, and will approach the position with great respect.” He is looking towards the future with confidence, he stated.