REFILE-UPDATE 3-Novartis taps Jimenez for industry challenges

(Corrects day in first paragraph to Tuersday)

* Drugs chief replaces long-serving CEO Vasella

* Still considers bid for Alcon minorities as fair

* Q4 net profit $2.3 billion, vs forecast $2.4 billion

* Sees sales growing at mid-single digit rate in 2010

* Shares rise 1.8 pct

(Rewrites, adds detail on executives, strategy, Alcon, shares)

By Sam Cage and Katie Reid

BASEL, Switzerland, Jan 26 (BestGrowthStock) – Novartis (NOVN.VX: ) on
Tuesday handed drugs head Joe Jimenez the top job with a mission
to guide the Swiss drugmaker through ever increasing competition
to its key medicines.

The chatty 50-year-old American steps up after just over two
years running Novartis’ dominant drugs unit and faces a tough
industry landscape as more blockbuster medicines lose patent
protection and the sector struggles to generate new products.

He takes over from Daniel Vasella, the longest-serving CEO
in European Big Pharma who is stepping down Feb. 1 after
overseeing the acquisition of U.S. eyecare group Alcon (ACL.N: ).

“I can, and the board can, hand over in confidence to Joe,”
Vasella said on Tuesday, reflecting on his 14 years as chief
executive. “I am leaving happily as CEO.”

Vasella’s departure marks the completion of a changing guard
at the top of the industry after rival European drugmakers
GlaxoSmithKline (GSK.L: ), AstraZeneca (AZN.L: ) and Roche (ROG.VX: )
have all brought in new CEOs.

Novartis Chief Operating Officer Joerg Reinhardt, who had
been tipped as a possible successor to Vasella, will leave the
company and the position will disappear.

Jimenez joined Novartis’s consumer health unit in 2007 and
soon took over the pharmaceuticals business, overseeing the
progression of several promising new medicines including
multiple sclerosis pill FTY720, or Gilenia, and cancer drug

His appointment at the head of a slimmed-down executive
board came as the company reported a 54 percent rise in
fourth-quarter net profit to $2.3 billion, helped by sales of
its H1N1 swine flu vaccines.

Shares rose 1.8 percent to 56.70 Swiss francs by 0905 GMT,
outperforming a slightly stronger DJ Stoxx European healthcare
sector (.SXDP: ).


Novartis has agreed to buy a majority of Alcon from Nestle
(NESN.VX: ), using the acquisition to insulate against losing
exclusivity on treatments like top-selling blood pressure drug
Diovan, and has since come under fire for its lowball offer to
minority shareholders.

The group still considered its offer – originally worth
$11.2 billion but dependent on share price moves – as fair,
Vasella said.

Novartis has had no negative feedback from its own
shareholders on the Alcon deal, said Vasella, who will remain as
chairman. [ID:nLDE60O0HT]

Novartis, whose Diovan loses patent protection in 2012,
expects group sales to grow at a mid-single-digit percentage
rate this year but said profit was difficult to predict given
the Alcon deal.

Impressive fourth-quarter numbers and the new CEO are
positives, but 2010 could still be a difficult year given
challenges like U.S. healthcare reform and competition to
Diovan, said Kepler Capital Markets analyst Tero Weckroth.

Sector investors will be closely eyeing results from another
diversified healthcare group, Johnson & Johnson (JNJ.N: ), due
later on Tuesday, for more clues on whether tapping new markets
away from prescription medicines is helping some drugmakers.

Novartis trades at a premium to GlaxoSmithKline, AstraZeneca
and Sanofi-Aventis thanks to promising new drugs like multiple
sclerosis pill FTY720 and a broad business base, but lags Swiss
rival Roche.

Analysts had expected Novartis to post a 53 percent jump in
fourth-quarter net profit to $2.4 billion. [ID:nLDE60J1YS]

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(Additional reporting by Paul Arnold; Editing by Dan Lalor and
David Cowell)

REFILE-UPDATE 3-Novartis taps Jimenez for industry challenges