Novartis is dissolving its high-profile cell and gene therapy unit operating under the guiding hand of Usman “Oz” Azam, Endpoints has learned.
Azam has issued a note to the 400 staffers in the group, which was obtained by Endpoints, that says:
“The risk of embarking on a new adventure in uncharted territory is that things don’t always work out as envisioned. Today, I have the unfortunate task of announcing that we are dissolving the Cell and Gene Therapies Unit.”
Novartis confirmed that the 400-member group is being disbanded, with most being “redeployed” to new positions while 120 could be left without a job.
That move is a stunner for many in the CAR-T field, especially after all the hoopla at Novartis around its work.
Azam and his team have played point for one of Novartis’s biggest pipeline moves, jumping in early on CAR-T therapies that reengineer a patient’s T cells into attack vehicles pointed at cancer cells. Working through a partnership at the University of Pennsylvania, the group has advanced one of the leading CAR-T therapies now in the pipeline, as it races against Kite $KITE and Juno $JUNO to be in the first wave of new drugs to hit the market.
The field has been moving fast, but not always forward. Juno experienced a brief interruption for its lead program when the FDA imposed a clinical hold for a few days that ultimately derailed its development schedule and delayed any application until 2018. That leaves Kite and Novartis racing to the FDA, with Kite planning a submission later this year.
At one point, Novartis CEO Joe Jimenez told reporters that he had made out a blank check for its CAR-T work, determined to pay what was necessary to get these drugs to the market as fast as possible. In a recent letter to shareholders, Jimenez highlighted the CAR-T work as a key part of its strategy for its oncology R&D effort. But in the midst of a heated Phase III rivalry, the pharma giant believes that an isolated unit no longer makes sense. And that is likely to add to the impression that Novartis is falling behind.
The news hit Kite and Juno as well, though. Shares of Juno dropped 5% Wednesday morning, with Kite down 4%.
— Jacob Plieth (@JacobPlieth) August 31, 2016
In response to a query from Endpoints, a spokesperson for Novartis issued the following statement:
“We have made the decision to re-integrate activities conducted by the Cell & Gene Therapies Unit into the larger Novartis organization, as part of a natural evolution of our internal organizational design. An isolated Unit worked well under our prior Pharma Division structure, but with a new integrated development model, we can efficiently advance our work on CART as part of our focus in immuno-oncology by reintegrating the functions.
This organizational change will not impact the plan to file CTL019 in pediatric r/r ALL with the US FDA in early 2017 and with EMA later in 2017.
Most associates who were previously dedicated to cell & gene therapies will now be redeployed to areas where they will share their knowledge and improve execution of novel therapeutics in the immunotherapy space to better deliver on our mission to improve and extend people’s lives.
These organizational changes will impact approximately 120 positions across several different Novartis affiliates. Novartis is committed to assisting in the placement of impacted associates wherever appropriate internal opportunities may exist and in treating displaced associates fairly and with dignity.”
In a followup, Novartis added that the move to dissolve the unit will not affect its collaboration with Penn.
Novartis and Penn have an exclusive global collaboration to research, develop and commercialize CAR T cell therapies for the investigational treatment of cancers. We continue to work with Penn under the terms of our agreement and look forward to advancing CART therapies.
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