How Novartis Vaccines & Diagnostics Turned Around the Ship it Got From Chiron
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dire shortage of flu vaccine in the U.S., Stober said. It also prompted top executives at Novartis headquarters in Basel, Switzerland, to assess whether the pharma giant should continue to hold its roughly 43-percent ownership stake in Chiron.
But Novartis also saw a huge opportunity, since Chiron’s share price had plunged while Chiron developed a remediation program for its Liverpool plant and plotted its strategy for regaining the suspended manufacturing license from British authorities. In late 2005, Novartis made a bargain basement offer to buy the rest of Chiron for $4.5 billion; the deal eventually closed at $5.4 billion in April 2006.
That’s when the heavy lifting in the turnaround began, at least as Stober tells the story.
Stober, who was vice president of biopharmaceutical operations at GlaxoSmithKline before joining Novartis, says the handful of senior Novartis execs who moved into Chiron found a variety of ills: compliance problems; poor supply chain performance; segmented production sites with no unifying culture; a disengaged management with low accountability; and a weak alignment between technical operations and quality.
“People were afraid,” Stober told me. “They were afraid to make decisions. They were afraid to stand up to senior management, and that hurt the operation.”
The Novartis team initially focused their efforts on people and quality, Stober said.
“Just about every product had supply constraints for lots of different reasons,” Stober said. “Many of them, though, fundamentally were people-related challenges. So the very first thing that we did was take the leadership organization and just systematically put the right leaders in place—strong, technical, business leaders—and that all by itself made a change.”
From there, Stober said Novartis moved to … Next Page »