Novartis announced disappointing sales for a key psoriasis drug and the looming retirement of its respected finance chief, which ...
Questions asked in this interview
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0:07Do you have any indication that this commitment, this level of commitment would be enough to get an exemption from tariffs in the interim until your new facilities are up and running?
1:39And to that end, have you had specific conversations with the administration on this point?
1:55In a similar way, do you worry that these investments won't make as much economic sense if there's a new administration in a couple of years who decides to roll back, remove any of the tariffs?
2:33What is your confidence that either of these factors will improve materially in the next few months?
3:38Which of those markets, the US or China, do you have more conviction in when it comes to this particular drug?
4:19I guess I wonder, are you surprised by the uptake of this medicine in recent months for patients with early breast cancer?
5:25At what point do you start to really reassess what the peak sales potential for this drug could be?
6:03Is there a lack of sufficiently priced attractive targets right now out there?
6:50Which specific areas make the most sense for you right now?
7:24How do you think about the brain drain, the discouragement to the Harvard community by what's going on in the political climate right now?
Shares of Novartis lower in US trading today despite the Swiss drug maker raising its guidance and announcing a $10 billion stock buyback. Instead, investors are keying in on disappointing sales for a key drug and news that its longtime CFO is retiring. All of this against a backdrop in which President Trump has signaled possible new tariffs on the pharma sector. Joining us now to discuss what's ahead is Vasant Narasimhan. He is CEO of Novartis joining us from their global research headquarters in Cambridge, Massachusetts. Vas, thanks for joining us. I want to start with the big picture, which is tariffs, of course, because you've pledged to invest $23 billion in US production over 5 years to make key drugs for the American market in order to mitigate the impacts of potential tariffs. Do you have any indication that this commitment, this level of commitment would be enough to get an exemption from tariffs in the interim until your new facilities are up and running?
Yeah, great to be here, Scarlet. So, we don't know what exactly is going to be required for the exemptions that have been talked about, but I would say that we are in a very good position right now and that we have inventory on hand in the US so that tariffs will not impact 2025. We continue to build inventories as well for now into 2026. And then we're working as fast as we can to get those facilities up and running so that more and more of our key medicines are produced in the US with a goal that within four years all of our key medicines are produced in the US for the US. So we're hoping that the administration will be pragmatic in how they think about this.
We've had conversations with the trade representative trying to understand the contours of what they're thinking about, but of course we don't know until I think the final policy is written and released.
Yeah, fair enough. In a similar way, do you worry that these investments won't make as much economic sense if there's a new administration in a couple of years who decides to roll back, remove any of the tariffs?
The way we think about this investment is we didn't do it because of the tariffs. It just makes strategic sense. I mean soon we expect the US to account for 50% of our global sales certainly by the end of the decade. So it makes sense to have production capacity in the US for the US market, Europe for Europe. And then of course we also build up capacity in China and Japan to service the Asian markets. I think that's a sensible strategic approach given all of the uncertainties that we've seen over the recent years.
I want to talk about your psoriasis drug Cosentyx. It saw slower than expected growth in the US for some new indications and then you also have the backdrop of a broader slowdown in China for innovative medicines. What is your confidence that either of these factors will improve materially in the next few months?
Look, I think in China I do expect there to be improvement over the second half of the year and going into next year as we grow off of a slower lower base maybe than we had originally expected. I think growth will come back and I think more broadly we expect Cosentyx to consistently deliver mid-single-digit growth. What's interesting about the focus on Cosentyx today is we have not moved off our 8 billion plus peak sales guidance in 2029 and Cosentyx has had many competitors over the years and we've been able to manage each one. Usually when those competitors come in there is a market reaction like we had today. And then we work through it and then we build confidence back. I think much more importantly when you look at our guide of 5% plus and with all of the launches performing well, I think in the long run investors will see through this and then continue, I think, to look favorably on our performance.
With respect to Cosentyx, both are critically important. I think very different dynamics. In China we have a very high growth environment and so obviously when you have a little bit less growth it has an impact. In the US this is a very significant medicine already approaching $3 billion plus in sales and so there of course it's much more of managing competition, new indications, new formulations to continue the growth. But look, I think overall as I said 8 billion plus, we're sticking with it and we feel confident we'll get there.
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Narasimhan, V. (2025, July 17). Novartis CEO Vas Narasimhan Talks Psoriasis Drug, China Growth, M&A | Bloomberg Talks [Interview transcript]. Bloomberg Podcasts. CEOInterviews.AI. https://ceointerviews.ai/interview/1151959/
MLA
Vasant Narasimhan. "Novartis CEO Vas Narasimhan Talks Psoriasis Drug, China Growth, M&A | Bloomberg Talks." Bloomberg Podcasts, 17 Jul. 2025. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/1151959/.
BibTeX
@misc{narasimhan2025_1151959,
author = {Vasant Narasimhan},
title = {Novartis CEO Vas Narasimhan Talks Psoriasis Drug, China Growth, M\&A | Bloomberg Talks},
howpublished = {Interview transcript, Bloomberg Podcasts. CEOInterviews.AI},
year = {2025},
month = {jul},
url = {https://ceointerviews.ai/interview/1151959/},
note = {Speaker-attributed transcript with timestamps}
}
