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Novartis plans more investment

By Liu Jie (China Daily)
Updated: 2009-04-13 07:48

The world's third largest pharmaceutical company Novartis Group will invest heavily in Chinese market through its innovated drugs arm despite the global recession.

The Swiss drug giant will put money into overall strength enhancement in China, including sectors of research and development (R&D), marketing, and sales. And to meet the demand of expanded facilities, larger recruitment scheme is expected this year, according to Joseph Jimenez, CEO of the Novartis Pharmaceuticals Division.

He denied to revealing the exact amount of the investment, only saying that it is a considerable amount.

Novartis Pharmaceuticals will launch six new innovated products in China and is significantly increasing the number of clinical trials conducting in China in 2009 versus 2008.

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Novartis Group posted net sales of $41.5 billion and net income of $8.2 billion yuan in 2008, while its investment on R&D reached $7.2 billion.

"We are continuing investing in our R&D center in Shanghai and it's a long-term and scaled investment," said Jimenez. The company's R&D center in Zhangjiang Hi-tech Zone, set up in November 2006, is one of three core R&D facilities it has around the world. The other two are in Basel and Cambridge, Massachusetts of the US.

The Basel-based company will further strengthen its cooperation with the Chinese government and hospitals, eyeing the Chinese central government's 850-billion-yuan medical system reform package.

It will also pay more attention to community clinics and started carrying out community residents education and grass-root physician training on some common chronic diseases, such as cardiovascular diseases.

The pharmaceutical firm owns a series of products targeted at chronic diseases, including Diovan/Co-Diovan and Exforge for hypertension, Exelon for Alzheier's diseases, Xolair for asthma as well as Voltaren/Cataflam for pain relief.

Novartis has 3,500 employees in China, around 2,700 of whom work for Novartis Pharmaceuticals (its pharmaceutical arm). Some 500 of them joined in 2008. The global CEO said that a larger recruitment scheme is expected this year. A bulk of the new positions will be sales staff, he added.

"We are investing heavily at the time when others are starting to pull back. We are doing it because we believe if we invest now, at the end of the recession and along with the continuing economic acceleration of China, we will emerge as a much stronger company," the CEO said, adding that Novartis balances investment in China with reduction of investments in other markets, which do not have the same growth potential as China.

"We are reducing the number of people that we have selling, for example, in the US," he said. Novartis announced a restructuring of its US sales force last November, resulting in the elimination of 560 sales positions.

The company's China unit, which covers patent drugs, generics, healthcare products and vaccine sectors, generated turnover of 3.3 billion yuan last year, a 29 percent jump from 2007. It expected to achieve 30 percent year-on-year growth in 2009. Its pharmaceutical arm is growling at a similar pace in China.

Novartis Group had invested a total of over 3.3 billion yuan in China as of the end of last year.